President Trump is a man on a mission. His administration has categorically targeted every one of its allies. The protectionist measures employed by him has sparked off a fear of global recession, one that was witnessed in 1930’s. What might have instigated him? one might wonder. Was it the growing presence of China? Or the colossal trade deficit with major economies of the world? Or both? Let us evaluate.
Trump ran for the office with a promise to either negotiate or rescind the pacts that he felt was giving America a raw deal. So far, he withdrew from the Paris Accord, Trans-Pacific Partnership and Iran Nuclear Deal. He also promised to renegotiate NAFTA and the NATO military funding.
In February, Trump announced a hike of 25% and 10% on steel and aluminium imports respectively. Sending across shock waves across the globe. It was believed to be aimed at China for its failure to address the growing deficit between the two. But it must be noted that China meets only 2% of raw materials requirement of the U.S. Furthermore, the move seems to have backfired as China has vowed to slap a retaliatory tariff on American products.
Besides, Canada and Mexico have expressed their disgruntlement, so has the European Union. India too is not far behind, by announcing a tariff hike on 29 products(excluding Harley Davidson, which has been the bone of contention between the two) it has made it stance clear. Although, it has taken a stab at reducing the deficit by offering to buy oil, gas and defence equipment worth USD 5 billion, which will significantly reduce the deficit which currently stands at USD 23 billion. Any further aggression towards its trusted ally might further dent the ties between the two countries, especially after the immigration episode.
With Trump administration showing no signs of slowing down. It won’t come as a surprise if major economies of the world come together to isolate America on the key issues on a global platform. Or Trump might become successful in bringing back the lost glory that America was identified with. His stellar domestic record cannot be discounted.
With the concern over the trade mounting each day, the world is watching in anticipation what the mercurial President has in store for them.