Trumps trade war
A trade war is a situation where nations try to destroy each other’s trade by obtruding tariffs or allocations on imports. It happens when a country goes against another by raising import duties or placing restrictions on another country’s imports. This is done to protect domestic industries and the creation of jobs.
President Donald Trump in his efforts to create more jobs has started a trade war. His strategy of decreasing the U.S trade deficit which stands at $621 billion has led him to impose tariffs on imports which has caused multiple battles with several countries particularly China.
The first battle involving Solar Panel and Washing Machine. After President Trump approves defense tariffs on imports of solar panels and on washing machines it caused a stir. China and South Korea reacted against this. The second battle on steel and aluminum included tariffs affecting mostly Canada, EU, Mexico, South Korea, and China, which was later lifted on a few countries due to retaliatory tariffs of other countries. Trade war with the EU being the third battle, EU responses to US tariffs by threatening 25% tax on US imports which has caused a tussle between the two nations for a long time. The battle on tariffs on Mexico happened after Trump threatened to impose 5% tariffs on all US imports from Mexico to cater to “the emergency at the southern border, “which was later lifted after discussions in the reduction of illegal migrations. The battle between the US and China which began when the US put a 25% tax on Chinese exports which led to the nations imposing debts on each other till an agreement is reached.
The trade war has had vast effects;Companies have made loses due to the increase in taxes, the employment rates have dropped due to increasing input costs, housing rates have increased to about $1,245 a year for the average American, a crucial indicator of manufacturing freight rail traffic has slowed down drastically.
A trade war can have a few positive effects on a nation’s trade but not long term. In the long run, it can have immense effects on economic growth. The US is in war with Mexico, China, Canada, and the EU affecting America since the countries will sign trade agreements with other countries. Trades should be equally beneficial to involved parties to avoid conflicts and in-depth problems caused by trade wars.