Economic Consequences of Trump's Trade Wars

ECONOMICS
STUDENT ID:
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A. Introduction
Name of Article: What are the economic consequences of Donald Trump’s trade wars?
Link to Article: https://www.ft.com/content/ec8f616e-9fd9-11e8-85da-eeb7a9ce36e4
B. Bullet Points
1. The IMF has raised concerns about slowing global economic growth in the medium
term in the wake of trade war between US and China.
2. Till now, punitive tariffs have been exchanged between US and China along with US
and Mexico, Canada and EU with differing intensity.
3. The effect of these tariffs on economic growth till now has been insignificant as the
tariffs in place account for a small portion of the global economy and trade.
4. With regards to future impact, there is difference of opinion.
5. However, data from US manufacturing surveys already shows signs of weakness with
the moderation of export orders and this is also extending to other countries.
6. Economists indicate that trade wars besides resulting in job loss, higher consumer
price would lead to economic slackening.
7. A tit for tat approach going forward can widen the scope of the trade wars and can
have a significant impact both directly and indirectly.
8. The effect of this trade war would not be limited to US and the countries directly
involved but would extend to emerging markets particularly in the form of currency
instability fuelled by a strengthening US dollar.
C. Summary of Article
With regards to the current trade war between USA and China, the IMF had already warned
about the adverse effects on global economic growth in the medium term. But the signs of
economic growth slowing down have already started to appear. It is noteworthy that till the
extent of tariffs that have been applied are only a small proportion of the global economy as
these are being applied in phased manner. Also, in certain cases such as USA and EU, fruitful
discussions are de-escalating the trade tensions. While some experts indicate that the future
tariffs would not have any significant impact, others opine differently (Strauss, 2018).
In this regards, there seems to be a slowdown in manufacturing witnessed in US and
Germany where the foreign orders are on the decline owing to tariffs overhang. Going