"We will start being very rich again." The euphoria of the American President deflated like a soufflé after China’s retaliation, which has just imposed similar customs duties of 34% on American products, effective April 10. The brutal and massive imposition of tariffs on all American imports not only shook the world but, above all, triggered the beginnings of a crisis in the stock markets. Wall Street was the first to feel the shockwave of what is being called the first protectionist move since 1930. The American stock exchange opened Friday morning with all stocks declining and closed the day with losses amounting to several billion dollars. Described as a "poker move," the strategy of the Oval Office occupant quickly revealed its fragility. The great "Bluff," as analysts from all sides have dubbed it, raises the specter of a global recession in the face of an equally radical reaction from the Middle Kingdom, prompting President Trump to subtly suggest keeping the door open for dialogue with Beijing, despite his barrage of particularly aggressive tweets.
From Frankfurt to Paris, London to Milan, Madrid to Singapore and Tokyo, the financial world was weighed down by the escalating trade war between the two giants. The American surtaxes could reduce global merchandise trade volume by about 1% for the remainder of this year alone. The first reactions against this approach came from the American Retail Federation, which judged that the Trump administration’s strategy "is not working."
For American companies, finding alternatives to continue their low-cost operations outside of China proves challenging, as the transition remains difficult and costly, with infrastructure often inadequate. Sweeping away 40 years of commercial cooperation with China with a simple signature is neither reasonable nor productive, according to specialists.
In this clash of titans, the world is caught in a vise. Emerging countries will likely be the first victims of this trade war, where, ultimately, there will be no winners.
El Moudjahid
