Last week, president Donald Trump announced plans to increase tariffs on aluminum and steel imports.
Trump’s plans threaten to cause a trade war, something the United States has not seen since the 1930s. His announcement has already led to threats of retaliation from the European Union, Canada, Brazil and China. Such a trade war would be detrimental to both the US economy and the global economy.
Initially, Trump defended his plans by saying that trade wars are good. He later changed his story, saying that the increased tariffs would not cause a trade war. Both ideas are wrong.
Trade wars create a self-sustaining race to the bottom in which countries create more and more tariffs in order to keep up with each other until global trade eventually comes to a near halt. It’s happened before. The result? Global recession.
Trump’s plan has already set into motion the beginnings of a trade war. Global superpowers are threatening counter-tariffs, and when they implement those tariffs, a trade war will result.
Trump needs to roll back his tariffs before he starts a trade war that serves only to harm the US and the world.