TAIPEI, Taiwan, October 9, 2018 (Newswire.com) - Pascal Lamy, former head of the World Trade Organization, has warned that President Donald Trump is isolating the American and Chinese economies from global trade.
Since early this year, Trump has imposed a raft of import tariffs on Chinese products with the aim of decreasing China’s US trade deficit. The strategy is designed to make Chinese products less affordable and less attractive to consumers. However, China has reacted to the imposition of tariffs with tariffs of its own which have in turn increased the cost of US goods for China’s consumer population.
Analysts at Burton Mills say the ongoing trade dispute will alienate both economies from each other and that both China and the US will become de-globalized.
Lamy stated that Trump is trying to separate the US economy from the Chinese economy in an effort to curb China’s economic rise.
Burton Mills analysts say that this economic separation will have far-reaching consequences for trade. The steady disentanglement of the two economies, which is already underway, will cause a de-globalization of trade. This will have to be dealt with in the short term by all economies.
While Burton Mills analysts believe that globalization will still play a strong role in global trade and that China and the US will play their parts, they say the countries will no longer operate in harmony.
The US is already looking to form a closer trading relationship with the European Union while China will seek alternative trading partners. Attitudes towards free and open trade are shifting and are no longer what they were a decade ago.
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Source: Burton Mills