US President Donald Trump will leave the trade war soon. He decides to put a tariff after another. Earlier, a US president did not make such conservative decisions like the trump.
On Thursday, Trump decided to impose 25 percent and 10 percent tariff on steel and aluminum import respectively. This decision will be passed this week. Then he warned to impose taxes on the import of cars from the European Union (EU). The information was released on Sunday in a BBC Online report.
According to Trump, other countries are taking advantage of the 'Stupid' trade agreement year after year.
After the announcement of imposing trump tax on aluminum and steel, the EU said they will impose 25 percent duty on import of goods from the United States. The EU is importing about three billion dollars worth of goods from the United States. Responding to the EU's response, Trump threatened to put duty on the car again.
Earlier in a tweet on Friday, Trump said that trade war 'good' and 'easily win' That is to say, the desire of winning easily in a war of criticism awakens the president of the US president. Trump says, when a country (the United States) trades in business with almost every billion dollar business, it is easy to trade and win easier. He said the tariff was being imposed in the interest of the American national security.
But the interesting thing is that the United States allies are desperate to fight China, but this battle is frustrating. It is true that China controls about 50 percent of the steel market in the world market. But China has 1 percent of the total steel imports in the United States. Rather, bigger parts come from Canada and Brazil. Canada's imports are 16 percent and Brazil's 13 percent. Where Canada and the EU export steel worth $ 45 billion in the United States alone, there are only $ 10 million in China. On the other hand, roughly this amount of soybean is imported from the United States to China. If China is now paying the tariff, the losses will be the same as the two. China has already given such threat. Experts say trump decisions are good news for American iron and aluminum producers, but other industries which are dependent on iron and aluminum, will be affected by the loss. Even for the job they are fighting in the trump. The employment rate will also be at risk.
Angry Canada is also preparing to respond. Canada's Foreign Minister Christia Freilland said that the rules and regulations on steel and aluminum in Canada should be imposed? In this, Canada will take a counter-plan for the interest of their business and workers' benefit. Canada thinks that these duties will hinder both sides of the border.
The EU says, if the trump threw bricks, they are ready to throw the bat. European Commission President Jean-Claude Yuncker said, "If our labor market is damaged due to the American adopted system, we will not be seated."
The International Monetary Fund (IMF) warned about the consequences of these hasty decisions on the trump. They say that the United States will face losses like other countries by imposing duty on steel and aluminum. World Trade Organization (WTO) Director-General Roberto Azevedo said that there is no interest in the war in trade.
Why is this trade war trump? In this case, a political analysis can be given. In 2020, there is now a danger of getting the job of second term. Even the election campaign started even faster than any other president. Trump is suffering from various scandals due to the image crisis. In such a situation, he wants to achieve the confidence of the people by fulfilling the election commitment.
One of the steel producing states in the United States is Michigan, Pennsylvania, Illinois, Alabama, Ohio. The swing states or the swinging states are called those states that are engaged in the elections on one side of each other. The elections are won in these states. Most of these steel producers are swing states. Trump won more swing states to win the last election. So these states need a lot of votes for trumps.
But what are the analysts talking about this fate? Douglas Arin of Barry Aichengin and Dartmouth University, a trade analyst at the University of California, said that the previous trade war incidents have been reviewed, it is not the right decision. During the Great Depression, the effects of tariffs were badly damaged.
Economists say that in the 1930s, the main reason for the deluge was the trade protection policy. Economists generally do not agree on any matter, but agree that no one can win the trade war.