94Ha ViewpointTrump’s inauguration promises to usher in an era of upheaval in global commerce, and even before he returns to the White House, governments are scrambling to respond to tariff wars.
Soon after calling to congratulate Trump on his Nov. 5 election, officials quietly began figuring out how to please him while also drafting countermeasures to fight back if necessary.
The threat against China is long-standing, meaning Beijing’s leadership has plenty of time to prepare defenses and retaliatory strategies. But this time, Trump and his trade hawks are hitting further, and the trade war could be longer and more unpredictable than the one during his first term.
Mexico and Canada have borne the brunt of Trump’s trade threats since voting day, prompting leaders of the two U.S. neighbors to publicly threaten retaliatory measures. Other countries are preparing for the rainy day — Vietnamese officials have pledged to buy more U.S. goods, the European Union has beefed up its ability to retaliate, and Indian officials aim to negotiate their way through the coming storm.
Yeo Han-koo, a senior fellow at the Peterson Institute for International Economics and former South Korean trade minister, said that compared with 1.0, Trump’s trade policy 2.0 seems more radical. It’s like a prisoner’s dilemma – the best scenario for all these countries is to join forces against the United States, but each country wants to get better conditions than its opponents based on its own interests.
Bloomberg Economics pointed out that Trump’s threat to impose a 60% tariff on Chinese imports and a 20% tariff on imports from the rest of the world, if implemented, may fundamentally change the structure of global trade flows and make it no longer centered on the United States. If countries also take retaliatory measures, it will aggravate the relevant impact.
