Mohammad Amjad Hossain :
President Donald Trump of the United States has in fact begun war on global trade in order to save deficit in trade with the United States of America on the pretext of national security. Having dilly-dallying for a while President Trump announced he has imposed tariff on importation of aluminum and steel from Europe, Canada and Mexico as well. 25 percent tariffs on steel and 10 percent on aluminum have been imposed marking major trade war with US allies. President of European commission, Jean-Claude Juncker, Canadian Prime Minister Justin Trudeau and Mexican government as well came out with severe criticism against imposition of tariffs on imported aluminum and steel.EU called the step a blatant intervention that amounted to protectionism and it raised the prospect of countermeasures while Canadian Prime Minister is reported to have said:” the idea that we are somehow a national security threat to US, is quite frankly, insulting and unacceptable”. President Trump is reported to convey historical misleading information while talking to Canadian Prime Minister on telephone regarding imposing tariffs in explaining threat perception. President said Canada destroyed white house in 1812 during war. That was totally misleading. It was British troops destroyed the White House in retaliation of US attack on Ontario and York—two Bristish colonies.
Germany’s luxurious cars: Mercedes Benz and Volkswagen cars has become an eyesore to the President who is reported to have witness cruising Mercedes Benz on 5th avenue in New York, which is major thoroughfare in Manhattan in New York where incidentally Trump tower is located. President has threatened to stop importing German luxurious cars. German car makers control 9 percent of US premium auto market. From European Union, German stands as biggest exporter of cars to the United States. According to US census, exports from the United States to European Union stands at $ 104,8887.2 million while imports from European Union totals $ 157,339.3 million until April of 2018. That means trade is in favor of European Union. Tit for tat has begun. The European Union has declared $ 3.4 billion in tariffs on US goods which has become tit for tat for Trump’s tariffs on European aluminum and steel. The tariffs imposed by European Union would take effect from July. President Trump faced heated debate with allies in Europe during G-7 Summit in French speaking Quebec in Canada held on 8-9 June. There President Trump has had bilateral meeting with Canadian Prime Minister, apart from French President. Both are critical of President Trump. As reported in news media, President Trump has refused to sign joint declaration of G-7 summit on the pretext of severe criticism levelled by Canadian Prime Minister against President Trump. Trump also drew criticism for suggesting to bring back Russian Federation in G-7 summit. The proposal was knocked down. Russian Federation was kicked out of G-7 summit following unlawfully occupation of Crimea Peninsula of Ukraine. Moreover, Prime Minister of Canada is frustrated with slow moving trend to replace 1994 North-American Free Trade agreement.NAFTA was signed between United States, Canada and Mexico during presidency of Bill Clinton. As of now picture emerged that the United States has become isolated from Atlantic alliance. Nobel laureate on economics Paul Krugman, who is distinguished Professor of Economics at graduate center of the city University in New York, considers the disaster took place that unfolded in Quebec which could herald the beginning of a trade war.
President Trump would face difficulty to impose new tariffs without clearance from Congress. A bipartisan legislation is now in place to review any new tariffs before take effect. Many Republican lawmakers are against administration’s aggressive trade war.
China, second biggest economy in the present-day world, is also facing trade war with the United States. The White House in the first week of June announced it would proceed with $ 50 billion in tariffs on Chinese imports and new limits on Chinese investment in US tech industries. However, specifics of the investment restrictions and enhanced export control would be announced on 30 June in spite of the announcement by Treasury Secretary Steven Mnuchin that a trade war with China was on hold. Consumers in the United States will be much affected if tariffs on Chinese made products are imposed. It will be interesting to witness whether Trump brand and Ivanka brand products from China are exempted from imposition of tariffs.
It is not understood why on earth Trump administration has started antagonize its allies in Europe, apart from China. As a matter of fact, federal budget of the United States depends on US allies, apart from China. The People’s Republic of China by now turns out to be major shareholder of treasury bonds of the United States. Therefore, US debt to China stands at $ 1.19 billion as of March of 2018 which turns out to be 19 percent of the $ 6.29 trillion in treasury bonds, notes and bills held by foreign countries. It will be interesting to witness tussle between President Trump and Congress in implementing new tariffs.
(Mohammad Amjad Hossain, retired diplomat from Bangladesh who writes from Virginia, USA)
