The global trade war is intensifying with every passing day. And it is making markets jittery.
While the China-US spat is the most discussed in public media, there is simmering tensions, if not fully blown trade wars, between US and EU, Japan and US, and now India and the US. According to Reuters, India announced it will impose tariffs (some as high as 70%) from the 16th June 2019 on 28 US products, including almonds and apples, in retaliation to Washington's refusal to exempt Delhi from higher taxes on steel and aluminum imports.
These spasms in international trade couldn't have come at a worse time. The global economic outlook doesn't look great with most projections pointing to a slump in growth within the next eight to twelve months (if not sooner). There is already uneasiness in most industrial economies about the projected sluggish growth, not least in Europe, thanks to the unending debate about Britain's intended withdrawal from the European Union, Brexit.
In an oped in the Namibian of July 13, 2018, I argued that "the US-China trade war should be a source of consternation for many countries". As I pointed out then and here, trade wars do not only have economic consequences, equally, if not more so, they are a problem in politics as well. There is enough reason to be concerned about the direction that the emerging global order is taking which is arguably more protectionist.
A tit-for-tat in international trade is a zero sum game that will leave the global economy worse off even in the most optimistic outcome. Suggesting that international trade wars is a threat to peace and prosperity would be a gross understatement.
While the China-US spat is the most discussed in public media, there is simmering tensions, if not fully blown trade wars, between US and EU, Japan and US, and now India and the US. According to Reuters, India announced it will impose tariffs (some as high as 70%) from the 16th June 2019 on 28 US products, including almonds and apples, in retaliation to Washington's refusal to exempt Delhi from higher taxes on steel and aluminum imports.
These spasms in international trade couldn't have come at a worse time. The global economic outlook doesn't look great with most projections pointing to a slump in growth within the next eight to twelve months (if not sooner). There is already uneasiness in most industrial economies about the projected sluggish growth, not least in Europe, thanks to the unending debate about Britain's intended withdrawal from the European Union, Brexit.
In an oped in the Namibian of July 13, 2018, I argued that "the US-China trade war should be a source of consternation for many countries". As I pointed out then and here, trade wars do not only have economic consequences, equally, if not more so, they are a problem in politics as well. There is enough reason to be concerned about the direction that the emerging global order is taking which is arguably more protectionist.
A tit-for-tat in international trade is a zero sum game that will leave the global economy worse off even in the most optimistic outcome. Suggesting that international trade wars is a threat to peace and prosperity would be a gross understatement.
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