Imminent trade war

When America sneezes, the rest of the world catches a cold.

- MARY ANN LL. REYES

After all, the US economy accounts for nearly 24 percent of global GDP. The dollar is still the leading reserve currency, accounting for 60 percent of international foreign exchange reserves. The US is also the world's largest importer, even bigger than China.

US President Donald Trump just announced that the US is imposing discounted reciprocal tariffs in retaliation for what he describes as unfair treatment by the world on US products.

How this will impact the global trade landscape remains to be seen, but what is sure is that a number of countries are going to impose retaliatory measures, making it more expensive for US products to enter.

Trump wants the US to be exporting more and importing less. He wants to bring manufacturing capacity back to US shores in sectors such as pharmaceuticals, semiconductors and cars, not only to create more jobs for Americans but also to cut down its one trillion dollar trade deficit.

If the higher tariffs are going to be imposed on all US trading partners and everyone retaliates with increased duties on US exports, the global impact will be devastatingly enormous. A global trade war seems inevitable.

The reciprocal tariffs vary, but the baseline tariff for all countries is ten percent effective April 5. More than 60 countries considered by Trump as the worst offenders will have higher tariffs beginning April nine, and these include the Philippines, which will be slapped with a 17 percent tariff or half of the 34 percent (import duties plus value-added tax) that it imposes on US products.