Risks of a trade war between China and the United States under Trump
Hello friends of Project HOPE, I hope you are well, today I would like to share some information about something I have been thinking about these days, since Trump has won and his next term is coming in January, and knowing the character, The reality is that radical policies are expected, at least according to what he has mentioned lately.
The detail is that during Donald Trump's presidency, we all witnessed an escalation of trade tensions between China and the United States, marked by the imposition of tariffs and trade restrictions. This “trade war” had profound implications for the global economy and posed several significant risks.
One of the main dangers was the decrease in global trade. By imposing tariffs on key products, such as technological and agricultural goods, both powers generated uncertainty in international markets. This not only affected consumers in both countries, who faced higher prices, but also trading partners in Europe, Latin America and Asia, which depend on trade with China and the US.
Another critical risk was the destabilization of global supply chains. Multinational companies that manufactured components in one country and assembled them in another had to rethink their operations due to rising costs. This fueled a slowdown in key sectors such as technology, automotive and manufacturing.
The trade war also exacerbated the volatility of financial markets. Investors around the world reacted to the tensions with nervousness, causing declines in stock indices and a flight into assets considered safe, such as gold and Treasury bonds.
A long-term risk was the damage to diplomatic relations between both powers. The trade standoff served as a catalyst for other tensions, such as disputes over intellectual property, human rights and 5G technology. This fueled a geopolitical rivalry that could have lasting implications.
Finally, the trade war negatively affected American farmers and Chinese consumers. While farmers saw demand for their products, especially soybeans, fall, Chinese consumers faced rising prices on imported consumer goods.
What happened in the previous mandate demonstrated how economic tensions between two great powers can have massive collateral effects on the global economy, will the same thing happen again or will it be worse?.
