Originally published at: https://blog.12min.com/trade-war-brewing/
Evidently, the battlefield is now remodeled to serve the purposes of the New Era.
Two Major Superpowers are on the brink of full-scale Trade War that can shape the course of the economic future.
Let’s find out what makes this warfare so unique.
Who Should Read “Trade War Brewing?”? And Why?Almost the entire planet has grown tired of endless conflicts and battles. As it turns out, the bloodshed is now converted into an intellectual war, which calls into question our integrity and principles.
In the “Trade War Brewing?“ Report you’ll be introduced to the eventual aftermath of this clash and more.
Dive right in!
About The Economist Intelligence UnitThe Economist Intelligence Unit wants to be labeled as entirely independent research and analysis organization.
"Trade War Brewing? PDF Summary"American Administration led by the 45th US President Donald J. Trump released a report on the reasons for increasing tariffs on steel and aluminum imports from Eastern and Central Asia.
For the apparent logic to safeguard America’s interest, the Chinese manufacturers and importers are pushed back by additional fees imposed on them.
Although no one believes that China would act indifferent to the provocations, people at least hope that this little issue will not grow into a full-scale Trade Conflict. American Trade Organization is deliberately testing the Chinese readiness to play alongside the restrictions.
Indeed, this is a double-edged sword because China in response can enforce trade restrictions on agricultural products. So, according to experts, this war for the moment is not anywhere near its end.
Due to the political and economic sake of the world, a full-scale trade war has to be prevented. Global supplies and needs being met rely on the cooperation of these two Giants on the World Arena.
Logically, increased barriers and tariffs on imports and exports could reduce the power of the wide-ranging supply chains.
So basically, both countries will suffer economically due to the higher fees. From what we see right now, the world trade growth ratio is at serious risk in terms of slowing down the global progress.
As a result, many Republicans in Congress may wind up in a middle of nowhere, by losing their seats. In other words, if the global community continues to behave immaturely, world trade will suffer in years to come.
The idea of integrating the supply chains may inflict an insignificant recession on the US Economy in 2020. Moreover, dragging down US-China relations is not something the World Trade Organization (WTO) strives for.
Such an unfortunate escalation may endanger their credibility. Losing its influence means having lesser authority in managing the global supply network.
China may file a complaint to its American counterparts about the steel and aluminum fees. As a matter of fact, Central and Eastern Asia depend on American metals.
Following a negotiation can eventually mean that one of the parties may receive the go-ahead from the WTO. Favoring one or the other country may leave the other one exposed to external influences.
An American Victory could spark a whole different behavior in protecting the country’s supplies and asserting dominance. In case of Chinese Victory, WTO could encourage the Americans to stick to the tariffs and cast doubt upon global agreements.
Each decision will inflame instability in the global arena, and further destabilize the fragility of world-trade liberalization.
Japan is growing increasingly closer with its European allies and is inclined to nurture the Trans-Pacific Partnership. On the other end, US isolation may represent a turning point in the worldwide dominance as far as trade is concerned.
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"Trade War Brewing? Quotes"[bctt tweet="After setting the global trade agenda for the past 70 years, the current position of the Trump administration has left the US isolated." username="get12min"]
[bctt tweet=“With the US turning away from multilateral trade liberalization… China now has the opportunity to help to set the rules of engagement.” username=“get12min”]
Our Critical ReviewIn all honesty, we don’t believe that we possess the means and expertise to gauge such an in-depth overview of the situation.
One thing is for certain; neither country wants to be on the receiving end of sanctions and outcomes which depict a fruitless economy.