Trump could cause the next global recession: here’s how

Trade Wars could cause a global recession, but it is not very likely. Trade Wars are bad for everyone, but less so for America, which already is on the losing end of an EU trade war: the European Union is the most protected market in the world, and America has massive Trade deficits with most of it’s Trading partners. President Trump is merely seeking a level playing field for the USA.

The USA already has tariffs on automobiles but it is 2.5%. The EU has 10% and China has 25%. Hardly Fair Trade.

The 25% Tariff on imported Steel and 10% on Aluminium imports should be seen as a bargaining position: for the first time in decades, America is looking after it’s own. This will have a very persuasive effect on the renegotiation of NAFTA and the TPP currently in play: negotiators now know that Trump doesn’t have to accept a bad deal in order to get a result. If he doesn’t get a fair deal that is giving US Businesses an even break, his fall-back position isn’t a bad deal, it is no deal at all. Canada and Mexico have much more to lose than the US on NAFTA. NAFTA trade imbalances transfer a Trillion dollar surplus to Mexico every year, and figures are similar for Canada. China has more to lose than either.

Expect concessions, not punitive tariffs against US exports.

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