Trump's commercial protectionism can turn into a global trade war
47. United States president Donald Trump is afraid about the degradation of the American economy. 1 of the most prominent manifestations of this degradation is the gigantic US trade deficit. Since the mid-1970s, the trade balance has shown a chronic deficit. The excess imports of goods over their export were and is covered by the US national Reserve strategy products – dollars. The US dollar position as a planet currency has stripped America of its incentives to economical development. There has been a gradual deindustrialization of America, camouflaged in all possible way by authoritative Washington, while American abroad debt has increased.
Donald Trump, possibly the loudest in comparison with all erstwhile presidents, acknowledged the economical degradation of America and made a number of statements on how he would save the country and reindustrialise it. 1 of the key pillars of his programme is to destruct a immense trade deficit, which, he said respective times, shows that America "subsidises" the remainder of the world. In reality, everything is precisely the opposite: the remainder of the planet subsidises America, "feeds" it with debt. Receiving in exchange for goods delivered ‘Iou’ called US dollars [ IOU – non-cash money – otherwise called (gyrical, or cartridge, IOU). Non-cash money (Iou) is simply a means of exchange based on the debt of a private undertaking or a natural person. The abbreviation (IOU) comes from the English phrase (I these you) – that is, I owe you – PZ ]
Let me give you any data on the U.S. trade balance. In 2022 there was a evidence trade deficit of $948.1 billion, with exports of $3,009.7 billion, imports of $3,957,8 billion. In 2023 the deficit decreased to $773.4 billion. Data for 2024 have just been published: the US trade deficit increased annually by 17% and reached the value of the monthly trade deficit in 2024 increased and reached a evidence value of $98.4 billion in December. This is the second highest monthly score after the evidence level recorded in March 2022.
Trump is determined to reduce the trade deficit, hoping that he can accomplish this first by reducing imports and then expanding exports. Import restrictions will guarantee customs duties. Trump has a differentiated approach to customs protectionism. First of all, given the balance of bilateral trade. Furthermore, the introduction of duties or the threat of their introduction may be utilized by Washington as a universal means of emphasis on the trading partner. This means that they may aim to force a trading partner to take certain non-trade activities.
From the point of view of the bilateral balance of trade, China, of course, is the main nonsubjective of Washington customs protectionism. Let's look at US trade deficit statistic at the end of 2023 according to trading partners. Of the full deficit of $773.4 billion, the majority came from trade with China – $279.1 billion, or 36%. For comparison, I will quote the following countries after China in terms of their contribution to the US trade deficit (dollar billions): Mexico – 152.5; Vietnam – 104.6; Germany – 82.6; Japan – 71.5; Ireland – 65.5; Canada – 64.2; South Korea – 51.1; Taiwan – 47.8. These countries are the main objectives of Trump's commercial protectionism policy. The first on this list is China.
There are already data on the trade balance between the United States and China at the end of 2024. US exports to China amounted to $163.6 billion, imports from China – $524.7 billion, balance (deficit) – $361.1 billion Over the year, US-China's negative trade balance for the United States increased by $83 billion, or 29.4%. China was liable for nearly 2/5 (39.3%) of the full US trade deficit in 2024! I am certain Trump has these statistic on his desk, which most likely makes him even more convinced that China should be the main mark of the White House's protectionist policy. 10 years earlier, in 2014, the US trade deficit with China was $345 billion. Already in January 2017, Trump, starting his first presidential term, announced that he was starting to reconstruct order to American-Chinese trade. But there was no apparent success. Although he subsequently imposed duties, in violation of planet Trade Organisation (WTO) rules, on around 1 5th of Chinese imports. So far we see “run in place”.
It is interesting to look at trade between both countries from China. Since the last century, the United States has been China's main trading and export partner. In 1995, China's exports to the United States amounted to $45.7 billion, representing 20% of the full Chinese exports. At the beginning of this century, the importance of the US marketplace for Chinese exporters increased even more. Thus, in 2002 the United States accounted for 25.8% of all Chinese exports. In the following years, it somewhat decreased to around 20% and remained at this level until 2018. Then US participation began to decline – seemingly influenced by Washington's protectionist actions. This share was 14.6% in 2024. Chinese exporters tried to decision distant from a strong dependence on the US market, realizing that anti-Chinese protectionism could increase. Especially if Trump goes back to the White House. In fresh years Chinese exports to Vietnam, a number of European countries and Russia have grown at an accelerated rate. However, Chinese exports to the United States besides increased rapidly last year. This seemingly had to do with the anticipation of Trump returning to the White House. Chinese exporters tried to push as many of their goods into the US marketplace before raising duties. By the way, American importers were besides in a hurry to realize that the time of inexpensive Chinese goods could shortly end, so they must have time to make their supplies.
Last year the overall export expansion of China was very dynamic. At the end of 2024 a evidence trade surplus of the Heavenly Empire was recorded – almost a trillion (the exact number is $992 billion). Trade with the United States represented 36.4% of the full surplus in China's abroad trade. possibly specified happiness will never again be seen in the Heavenly Empire.
The United States is believed to have started a trade war with China since 2018. And for Joe Biden's presidency, the war was suspended. That's not precisely true. Firstly, Joe Biden's administration did not revoke the duties imposed in Trump's time on Chinese goods. Second, she added something of herself. In May 2024 it announced a gradual increase in import duties on a number of Chinese goods (electric vehicles, photovoltaic panels, steel, aluminium, computer chips) within 3 years. They managed to bring in any things before Biden left the White House. It is actual that many saw Biden's decision as a run action before the presidential election.
Trump threatened to introduce import duties on all goods and for all countries without exception before moving to the White House. Including even goods from Europe. In early February, he announced import duties for goods from Canada, Mexico and China. For Mexican and Canadian goods, the rate of work will be 25% and for Chinese goods it will be 10%. On February 10, Trump introduced a 25% work on imports of steel and aluminium from all countries, including Europe.
As far as Mexico and Canada are concerned, the duties declared to them aim not only at bringing order to bilateral trade; they are besides a tool of emphasis on neighbours. Trump suggested that he could abolish these duties if Canada, and especially Mexico, restored order at the border with the United States and cut off the influx of illegal migrants and drugs. However, customs duties on goods from Mexico and Canada are besides intended to restrict their exports of goods to the United States. I would point out that it is not China that ranks first among abroad commodity suppliers on the American market. In 2023 Mexico was ranked first on exports to the United States – $475.2 billion. The second place included Chinese exports to the United States, which amounted to $426.9 billion, and the 3rd place included Canada – $418.6 billion, and the 4th place included Japan, far behind the "three" – $147.2 billion.
Only 1 day after the notification of the tariff provision Trump announced that customs duties on goods from Canada and Mexico would be suspended for a month. The observers explain this suspension by the fact that Washington is negotiating with neighbouring countries and the result of the negotiations depends on the further destiny of the duties. And how effectively the neighbours will work to block cross-border flows of illegal migrants and drugs. But in any case, it's hard to anticipate Washington to completely lift tariffs on Mexico and Canada. It can only lower the stakes.
No customs decree was suspended for goods from China. Moreover, on February 14, Trump told reporters in the White House: “I imposed on China very advanced tariffs of $600 billion. No another president has introduced so much.” As always Trump has somewhat embellished his function in history. He could not impose duties on specified an amount. After all, it was just stated that at the end of 2024 Chinese exports to the United States were $524.7 billion, and the evidence value of Chinese exports to the United States was $563 billion in 2022. But specified “inaccuracies” in Trump's statements are not the most important. The crucial thing is that specified unprecedented anti-Chinese protectionism will shortly return to America with a boomerang. Firstly, prices on the home marketplace are expected to increase as a consequence of the increase in prices of Chinese goods or their exchange for other, more costly goods of American production. Secondly, the global competitiveness of American goods with Chinese origin components will decline. Thirdly, counter-protective action by China is inevitable.
Beijing didn't take long. He has already imposed retaliation duties on coal, liquefied natural gas, oil, agricultural equipment and any cars imported from the United States. In addition, China has promised to restrict tungsten exports to the United States (China accounts for more than 80 percent of the world's tungsten supply; so far more than 1 4th of US tungsten imports come from China).
Incidentally, the line between conventional protectionist measures and economical sanctions is rather clear. Trump has already applied any sanctions to you during his first presidency. Thus, in August 2019, the U.S. Treasury Department accused China of currency manipulation (understated yuan value). On this basis, China was excluded from the list of U.S. government procurement participants (but in the following year Celestial Empire was removed from the list of currency managers). besides during his first word in the White home Trump signed an order prohibiting Chinese investors from participating in the capital of US companies from a number of sectors of strategical importance. At the same time, US investors were banned from acquiring shares of Chinese companies associated with the armed forces of the State of the Middle. Incidentally, anti-Chinese sanctions were besides introduced for president Joe Biden. For example, sanctions imposed on the Chinese semiconductor industry. The Chinese companies that violated anti-Russian sanctions imposed secondary sanctions. Last year, a series of "answers" came from Beijing. Thus, in May 2024 China decided to impose sanctions on 12 U.S. military-industrial companies and 10 their top-level managers for selling arms to Taiwan and in consequence to Washington's sanctions on Chinese companies cooperating with Russia to celebrate anti-Russian sanctions.
Most experts agree that America's trade war with China, launched by Trump in 2018, will return this year in a much more intense form. Incidentally, Beijing is not alone in its protectionist "responsibility" towards Washington. Canadian Prime Minister Justin Trudeau announced a 25% work on US goods worth US$ 155 billion. Mexico didn't wait long either. On 2 February 2025, Mexico's president Claudia Sheinbaum in consequence to Trump's tariff order recommended the Minister of Economy Marcelo Ebrardo to usage "tariff and non-tariff measures" to defend the country's interests. Most experts agree that Trump's order imposing import duties could trigger a global trade war. And as the planet experience shows, unlike average wars, there are no winners in trade wars. America won't be a winner.
Author: W. The President
SOURCE: Торговый протекционизм может обернуться глобальной
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