Even the most charitable assessment of the Trump administration's rationale for launching a global trade war reveals that the policy is utterly misguided. It rests not on empirical findings or economic theory, but on a mountain of assumptions – none of which stands up to even the slightest scrutiny.
ROME – The world is reeling from US President Donald Trump’s “Liberation Day,” when he announced the highest US tariffs in more than a century. The United States is hiking taxes on imports from almost every country in the world. Shoes made in Bangladesh and sold to American wholesalers for $20 will now cost at least $27. A machine part that General Motors imports from Europe for $200 will now cost at least $240. The White House’s new, supposedly “reciprocal” tariff increases range from 11% for the Democratic Republic of the Congo (DRC) to 50% for Saint Pierre and Miquelon and Lesotho. For the European Union and China, which already faced US tariffs, the rate is rising by an additional 20% and 34%, respectively. In the immediate aftermath, global markets have plunged, triggering fears of a global recession.
ROME – The world is reeling from US President Donald Trump’s “Liberation Day,” when he announced the highest US tariffs in more than a century. The United States is hiking taxes on imports from almost every country in the world. Shoes made in Bangladesh and sold to American wholesalers for $20 will now cost at least $27. A machine part that General Motors imports from Europe for $200 will now cost at least $240. The White House’s new, supposedly “reciprocal” tariff increases range from 11% for the Democratic Republic of the Congo (DRC) to 50% for Saint Pierre and Miquelon and Lesotho. For the European Union and China, which already faced US tariffs, the rate is rising by an additional 20% and 34%, respectively. In the immediate aftermath, global markets have plunged, triggering fears of a global recession.