Trade and trade policies have been an economic and political backwater for decades – definitely boring, apparently uncontrollion.
The trade was mostly free and became freer, rates became lower and lower, and the world more, no less, globalized.
But besides the long -term trends, there were some serious consequences.
Trump Latest: US President announces the global trading rates
Adult, developed economies such as the UK and the US have become increasingly dependent on cheap imports from China and in the process have reduced their manufacturing sectors.
Big stripes of the rust belt in the US – and much of the Midlands and north of England – were hollowed out.
And to a certain extent this is where the story of Donald Trump’s ‘Liberation Day’ really started – with the idea that free trade and globalization had a darker side, a side he wanted to correct via rates.
He imposed a set of rates in his first term, some on ChinaSome about specific materials such as steel and aluminum. But the height and the width of those rates were just so nothing compared to those we had just heard.
Not since the 1930s, the US has radically increased the level of tariffs at all nations around the world. At the time, the rates exacerbated the Great Depression.
It’s someone’s guessing about what the consequences of this will be. But there will be consequences.
Consequences for the nature of globalization, consequences for the US economy (rates are exceptionally inflationary), consequences for geopolitics.
The UK imports will have a 10% rate, while the EU will have 20% rates. Photo: Reuters
And to a certain extent, just knowing that a little more about the White House plans will provide some relief to financial markets, which have been on the imposition of rates for months. That uncertainty has recently reached unprecedented levels.
But do not assume for a moment that this saga is over. Nothing of the kind. In the coming days we will learn more – more about the nuts and bolts of this policy, more about the retaliation of other countries.
We may make more sense about whether some countries – including the UK – are postponing the rates.
To paraphrase Churchill, it’s not the end of the trade war or even the beginning of the end – maybe just the end of the beginning.
