Trade war brewing up

POLICYMAKERS WILL STRUGGLE TO BALANCE NATIONAL INTERESTS AND INTERNATIONAL COOPERATION

- ATANU BISWAS

President-elect Donald Trump threatened to sign an executive order immediately after taking office on January 20, imposing a sweeping 25% tariff on all goods from Mexico and Canada, as well as an additional 10% tariff on Chinese imports, until the Chinese government stops smuggling synthetic opioid fentanyl. This indicated that the Trump administration will aim at continuing to use tariffs as leverage for trade negotiations and to bring manufacturing jobs back to the country.

Indeed, the US has progressively backed off from its post-World War II position of pushing global free trade and lower tariffs, primarily in response to the loss of US manufacturing jobs, which is commonly linked to unrestricted trade and an increasingly assertive China. For instance, in March 2002, President George W. Bush imposed tariffs on a large number of steel imports. But Bush's chief of staff from 2001 to 2006, Andrew H "Andy" Card Jr., said, "The results were not what we anticipated in terms of its impact on the economy or jobs." It backfired because America's trading partners, particularly the European Union (EU), threatened to impose tariffs in retaliation on Carolina textiles and fabrics and Florida oranges. Additionally, a study conducted by the consulting firm Trade Partnership found that Bush's steel tariffs resulted in the loss of 200,000 American jobs. In fact, Bush initially planned to maintain the tariffs for three years, but he had to end them in December 2003.