Political Analysis

Donald Trump‘s hostile approach to renegotiating trade agreements with China and Canada has the global economy on the verge of a slowdown.

Trump is threatening to impose 25% tariffs on $200 billion worth of Chinese exports to the US if China doesn’t comply with his rules. Trump sees China as a currency manipulator who deliberately devalues the exchange rate of the Chinese Yuan to make Chinese exports more cheaper on the international market. In trumps eyes this has caused the US to have a trade deficit with China of more than $300 billion in 2017. Trump has also accused China of intellectual property theft and closing out investors from being able to invest in Chinese markets. 

If Trump goes ahead with his 25% tariffs on $200bln of Chinese goods and Beijing retaliate with tariffs on US exports to China, this threatens global growth as global growth as any slowdown in the world is too big as economies will have a major impact on all economies across the world.

Trump is also threatening to impose tariffs on EU automobiles as he has also accused Europe of being a currency manipulator. President Trump is also threatening to impose tariffs on Canadian automobiles if they do not sign the new trade agreement he has recently agreed with Mexico.