The latest trade offensive launched against China will inevitably escalate into full-fledged warfare. Imposing tariffs on 200 billion imports amounts to a vicious and indiscriminate attack triggered by mere irritation at the counter-veiling measures undertaken by the Asian giant. Unleashing such large-scale hostilities will raise the stakes prompting further bouts of unfettered retaliation on both sides. The US is already threatening to punish all trade flows totalling 500 billion.
Undoubtedly, Mr Trump’s behaviour is the most worrying aspect of this trade row. Moved by pride and prejudice, he acts as a warlord ready to destroy anything he reckons might challenge his whims to turn America into a self-sufficient fortress. While he was right in putting pressure on China for dismantling unwarranted barriers and unfair practices, bullying it in such an ominous way will backfire. The awesome turmoil following this trade war will hit growth and jobs worldwide, by shattering confidence and prospects.
Europe should take this danger most seriously as Trump can hit any target, without previous warning, regardless of the dire consequences it entails. When it comes to trade, Mr Trump becomes quite predictable. He’s ready to seal off his home market paying little attention to the daunting drop in overall prosperity his crude protectionism will bring about. Worse still, his disproportionate reaction against any attempt to resist him by following well-established rules will destroy the elaborate world free-trade rules built up since WW2.
Don’t bet on a potential economic backlash creating a loss in popular support in the forthcoming elections. Even if a trade war may ultimately hit blue-collar workers and farmers, they are unlikely to switch to sensible options. Those voting for Trump would probably prefer to sink the ship they travel in rather than heading to a safe haven.
