Trump’s Trade War: A Year of Uncertainty and Cost

Washington, Dec 18 (EFE).- The trade war started last April by the United States – a key part of President Donald Trump’s economic plan since returning to the White House – has created a year of uncertainty for markets and businesses. It’s also hurt the purchasing power of Americans, and that’s starting to have political consequences for the Republican leader.

Trump, who already focused heavily on protectionist policies during his first term (2017-2021) with the help of trade advisor Peter Navarro, announced on April 2nd a general tariff of 10%, with even higher rates for countries with large trade surpluses with the US.

Over the following months, several major economies, including Japan and the European Union (EU), negotiated agreements with Washington to lower thes tariffs to around 10%.However, these deals required significant concessions that strained diplomatic relationships, which are crucial for economic ties with the United States.

The situation with China was different. Trump had already engaged in a trade conflict with China during his first term,partially resolving it with the 2020 phase one agreement. But the 34% tariff Washington announced on April 2nd was instantly matched by Beijing.

This led to an escalation where the US imposed tariffs of up to 145% on Chinese goods, and China responded with tariffs of 125% on US imports.

After a long-awaited meeting between Trump and Chinese President Xi Jinping in October, the world’s two largest economies reached a temporary agreement. This included a tariff truce, and currently, the average US tariff on Chinese products is between 29 and 48%, while China taxes US goods at around 30-35%.

The Washington-Beijing conflict is now considered “frozen,” but it’s far from resolved. International organizations and central banks continue to report that it’s leading to slower growth, higher inflation, and inefficient global supply chains.