Trump’s ‘Liberation Day’ abandoned the world trade system without leader: ‘Globalization and Free Trade Period based on rules is over’
Now it’s a real trade war.
Beijing responded to Donald Trump’s “Liberation Day” tariffs on Friday and slapped all 34% of the US imports and matched the new mutual tax rate given by the US President on Wednesday. The tariffs come into force on April 10 the day after Trump’s tariffs.
The news has already shook a frightening US market and sent the S&P 500 almost 6% lower on Friday. Boeing – Once a third It is over 9%to China than 737 plane. The Chinese companies listed in the USA also performed poorly and the Nasdaq Golden Dragon China index fell to 9%.
The collapse in the US markets followed the ongoing decreases in Asia, which carries Trump’s “Liberation Day” tariffs. Japan’s comparison Nikkei 225 Index decreased by 5.2% on two trading days since April 2. South Korea’s kospi decreased by 1.6% in the same period. India’s Nifty fell by 50%1.8%. (Fortunately, Chinese markets, including Hong Kong, were closed for Qingming Festival or “Grave Sweep Day))
However, beyond market reactions, China’s retaliation increases the likelihood that Trump’s tariffs – supporters of their supporters either adapt to new taxes or hurry to the negotiation table to make concessions.
“Instead of correcting the rules that some US commercial partners have benefited from their benefits, Trump chose to fly the system that manages international trade, Yeni he says. “He took the ax to trade with almost every major US trade partner, holding a few allies or competitors.”
And now, the world faces a trade system without an open leader. Some countries will try to compromise the US, others will try to establish new trade connections with other economies, and others now see the opportunity to benefit from relatively low tariff rates to get their market share from competitors.
“Rules of globalization and free trade ended. We are entering a new stage that is more arbitrary, protective and dangerous,” Singapore Prime Minister Lawrence Wong said. He said. A video expression It came out on Friday.
“Global institutions are weakening; international norms are eroding. More and more countries will act based on narrow personal interests and use power or pressure to take their way.”
How bad will the tariffs have?
The Trump administration has usually applied wide tariffs above the 10% base line in the Asia-Pacific region. Southeast Asia was the hardest stroke, Cambodia and Vietnam were receiving 49% and 46% tariffs, respectively. China has previously announced 20% tariff, 34% tariff. Other East Asian economies such as South Korea, Taiwan and Japan received tariffs between 24% and 32%. In Asia-Pacific, only a handful-Australia receives the new Zealand and Singapore-10% base line.
On Thursday, Goldman Sachs lowered GDP forecasts in Asia-Pacific, Vietnam received the biggest hit, fell to 5.6%and 1.5 percent lower than the previous projection. Taiwan, which received a 32% tariff, also received a major blow in the bank’s estimates and reduced the percentage score to 1.6%.
HSBC estimated that 54% of tariffs on China – the current level given by Trump – GDP growth of China can get 1.5 percent of the 4.8% previous projection.
Analysts do not expect other Asia-Pacific countries to copy China while trying to resist Trump’s tariffs.
“Most of other countries will resist the urge to increase, Av says James Laurecson, Director of the Australian-Chinese Relations Institute University of Technology University, says. “Most countries in Asia continue to think that open trade is good for prosperity and security.”
“The mood in Australia is disappointing, but if the US wants to harm itself, the best strategy is not to respond to self -harm.” (Australia said will not retaliate Trump’s new 10% tariff).
“South Korea will make more concessions such as participating in gas projects in Alaska or buying more US agricultural products”, Ramon Pacheco Pardo and Korean Pacheco Pardo in Korean London in International Relations Expert Ramon Pacheco Pardo and King’s College London.
On Friday, US President Trump claimed that Vietnamese officials have offered to “reduce their tariffs to zero”. Southeast Asian countries had previously offered to reduce the tasks related to US imports. According to Local Outlet, Cambodia offered to reduce a number of imports up to 5%in a number of imports. Khmer Times.
Economies can also offer internal support, such as Taiwan’s announcement. 2.7 billion dollars Trump is hurt by Trump tariffs to help local manufacturers.
However, the United States will probably not be able to return to the economic priority in the region. Competitor Hazard: How to threaten the peace competition and weakens democracy. “The United States gradually alienated from the economic facts of Asia. America, in other words, does not have cards to do what he is trying to do,” he says.
What happens when nobody leads to trade?
For decades, the United States has been at the center of the trade system based on rules that supported institutions such as World Trade Organization and benefited from the huge consumer market. The US loyalty to free trade continued its rocket tasks to a level that has not been seen since the 1930 Smoot-Hawley tariffs, but now it is not as strong as the “Day of Liberation” suggested, but now it has explicitly abandoned the world trade system without its leader.
Singapore Prime Minister said on Friday, “the US is not the reform of now. He leaves the entire system he has created,” he said.
This can be risky. “A world in which hegemon has abandoned the obligations of international order care and is only in pure power and reserve-hooarding mode, is a danger for himself and others,” Jackson says.
The error lines are already starting to draw.
The Filipino, who made a relatively 17% tariff hit, sees the “Day of Independence as the opportunity to gain market share from its neighbors. Trade Minister Cristina Roque, Southeast Asian Chips, electronic and coconut exports to the United States, “We will definitely benefit from sub -tariffs,” he said. An Bloomberg TV interview Friday morning. “Now lower than our tariffs [competitors like Thailand]We will probably have a stronger advantage. “
Another possibility is that Asia establish new trade relations with other developed markets in the domestic or Europe or the Middle East.
Prasad will try to export the rest of the world, the rest of the world, market diversity, trade regulations that exclude the United States, and other approaches against a global trade war that approaches themselves, Belir
This is valid in China, already trying to establish connections with the global south. Beijing, Director of the Chinese team of the Eurasian Group, says Dan Wang, and encourages more companies to go abroad, ”he says. “As soon as they build factories abroad, they have to import machinery to set these factories.”
Economists had previously worried about a tariff helmet in response to a potential flood of Chinese goods.
Nevertheless, Wang thinks that there will be no “universal return ına to China’s property. He argues that “column industries such as automobile or green energy can provide“ strong return öne from foreign governments. But in the end, “China is a great manufacturer. Indeed, it is supplying goods that cannot be changed with a combination of another country, even other countries.”
And Beijing, at least compared to Trump, can win some Jerusalem as a relative stability castle.
“In the short term, China can take low -hanging public relations fruit and can collect easy gains by making what the US has done, Aust says Austin Strange, Professor of International Relations at Hong Kong University.
This story initially took part in Fortune.com
