TRUMP'S TRADE WAR: LOGIC IN FOLLY?

Author:Ploger, Ingo
Position:TRADE
 
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President Trump's developing trade war has reached several levels and escalations of coercion. In the beginning, it was the overthrow of multinational accords such as the TPP, the Paris Agreement and NAFTA. It then extended to bi-national relations.

The war started with steel, where the goal was to reach China but was extended to all countries. For Brazil and other nations in our continent, an agreement could be reached quickly. It was not long before the U.S. administration began to attack the European Union. As if that were not enough, Trump broke the nuclear agreement with Iran, placing the European Union in Russian president Putin's arms.

The sanctions on European companies supplying Iran and Russia, in areas classified by them as sensitive, have raised a great deal of concern about American retaliation for European companies in the United States. The sanctions against China have increased, and China's responses have come promptly. The U.S. relationship with Russia continues to be as ambiguous as possible and there is no clear vision of short-or long-term goals.

At this time, the U.S. finds itself increasingly isolated and has opened up a multitude of fronts of litigation--and the partners or contenders wonder how far this will be taken.

Foolishness is so great that it raises the questions of what can be behind it and whether it is possible to identify a strategy or even a logic.

The first answer may lie in U.S. internal politics. Congressional elections are near. If the Democrats win, the chance for impeachment increases, and Trump's government does not end well. However, polls show that, with GDP growing and unemployment falling, Trump's popularity is rising. If this leads to an election result that gives him a majority in the U.S. Congress, he stays at least until the end of his term.

The second reply is that the president's attitude is the same as he has always had in business negotiations: exaggerating as much as possible, in order to intimidate advantages beyond expectations. It is no wonder that in negotiations between the United...

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