Trump's return threatens to upend decades of trade policy with a radical agenda that could devastate global growth. His plans to hike tariffs and dismantle free trade agreements will have far-reaching consequences, making it critical for businesses and policymakers to brace for a turbulent economic future under Trump 2.0. By Deborah Elms, Head of Trade Policy at the Hinrich Foundation in Singapore.
Donald Trump's potential second term as President could radically alter global trade policies, pushing the world further from free trade. His aggressive stance, particularly on tariffs, isn't limited to China but targets all trading partners, threatening to disrupt global economic stability. The consequences could include higher costs for American households and significant global economic fallout.
Trump's previous administration set the stage by embedding protectionist policies into the U.S. trade system, a shift that has persisted even under President Biden. However, Trump 2.0 promises to be even more extreme, with plans to impose steep tariffs and reduce America's trade dependency. Such actions could severely damage global growth and development, making it imperative for the international community to prepare for the worst.
Key figures like Robert Lighthizer, Trump's likely choice for a senior economic role, support these radical policies. Lighthizer's vision includes using trade as a weapon to force "balance" and protect U.S. interests, even if it means bypassing established global trade rules. This approach could trigger a global trade war, with devastating effects on economies worldwide.
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