Mint Quick Edit | Trump’s trade war has flared up
Summary
- China and Canada have both struck back at America’s import tariffs, while Mexico plans retaliatory barriers too. Expect this theatre of trade hostility to expand and reverberate across the world.
When Warren Buffett lambasted US President Donald Trump’s imposition of tariffs as “an act of war to some degree," he wasn’t wrong. Of course, there’s no conventional battle going on. But hard blows characteristic of warfare are being exchanged in the field of trade.
Also Read: India must keep its strategic options open as Trump’s tariffs kick in
As an additional 10% tariff on China came into force on Tuesday—on top of 10% slapped on it earlier—China announced reciprocal tariffs on a raft of American agricultural and other products. Canada too responded to action against it with a tit-for-tat 25% levy on US imports worth $107 billion. And Mexico indicated its readiness to respond as well, although its plan isn’t clear, to a similar barrier erected by the US against it.
Also Read: Mint Quick Edit | Should Trump’s latest tariff salvos worry India?
What seems certain, however, is that a trade war has well and truly begun. Europe may be Trump’s next target and India should be prepared to face new barriers too. New Delhi has pre-emptively lowered some tariffs, and other moves are possibly being explored.
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Whether these will be enough to pacify Trump, though, is anybody’s guess. To be sure, India’s relatively small reliance on global trade means it is less vulnerable. But wars in far-off theatres of hostility tend to reverberate everywhere.
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