Trump’s trade wars release the genie from the bottle

Trump said that European Union was worse to USA on trade than China. RISS expert Vyacheslav Kholodkov noted that these serious words were followed up by serious action. In July, the USA expanded a list of goods from the European Union, which can impose duties. The EU warned that the US would face counter-measures if Trump went through with his threat. "Trump’s trade wars released the genie from the bottle. The World Trade Organization (WTO) is crumbling," he said.

According to the expert, the escalation of trade wars between the US and the EU was primarily due to the fall in America's industrial output. The US trade deficit is getting bigger despite all of Trump’s promises and his attempts to restrict imports. US goods export to the EU is valued at approximately $148 billion, and import amounts to $148 billion in 2019. America's trade deficit widened to $20 billion as the nation bought more cars and car parts from overseas. "US automotive industry was the world leading industry. America's cars were popular all over the world," RISS expert underscored.

As a pretext for imposing trade sanctions against other countries, Trump's strategy recognizes that economic security is national security. "According to WTO rules, members may impose trade sanctions only if countries are at war. But the US is not at war with the European Union," V.Kholodkov pointed out.

Other states have begun to follow the US example: Japan tightened controls on the export of some high-tech materials to South Korea. "The US trade wars have opened a Pandora's box. First of all, Trump is a businessman and knows how to properly count money. He is using the power of the US dollar across the world. But financial power that is not backed by a strong industry is fragile. Someday the dollar will collapse, and to prevent this, Trump began to restore industry of the country. But his efforts are unlikely to succeed," RISS expert said.

USA trade