Trump Escalates the Tariff War

It is a foregone conclusion now that the world is marching towards a new economic order. And it will be guided by protectionism. Those who have witnessed the fragile economic condition at the international level in the 1990’s can well imagine what is in store for the people. How markets were behaving abnormally, then. Downfall of the Cold War order led to the opening of the economy and a new dawn of globalisation and liberalisation was witnessed. It stood the test of the times and till date it enabled the people to indulge in trade and travel without any hassles. It created jobs and shaped the open economy. End of the Cold War and the collapse of the Berlin Wall shaped the progressive world order. Though the dismemberment of the USSR didn’t lead to the unipolar world in a true sense. The fallout of the Russia-Ukraine war has demonstrated that Russia still calls the shots and it can be said without any exaggeration that the NATO countries led by the United States (US) had to uphold the Russian interests and the US reprimanded Ukraine to lower the guard. There was the nuclear threat that is said to be averted as Russia was in no mood to budge.US under the Trump 2.0 has been bluntly pursuing the policy of protectionism and it has closed the doors for the global economic interaction by raising the tariffs for the countries doing business with it. After the Russia –Ukraine war the imposition of tariffs by the Donald Trump regime has thrust a global breakdown as the US wants the cost to be imposed on everything. The argument is absurd that the US has been spending and investing globally and the world must now pay it back. This is indeed ridiculous. In the spree of imposing exponential tariffs for doing business, the US has straightway targeted China and India. The US has taken the war with China to the next level as it has shifted the focus from geo-strategic thrust to economic assault. The US is dependent on Chinese imports at various levels of day to day needs. The imposition of the unimaginable tariff on Chinese goods has created a fertile ground for inflation and it will lead to global recession in the months to come if the ongoing tariff war is not stopped. And in response to the US policy of choking Chinese business interests, China too has paid back by imposing the tariffs. In this emerging economic conflict China has shown a strategic shift. As it can be gauged from the Chinese posturing that it wants to engage with India. Chinese President Xi Jinping has underlined that India-China relations are important. The present crisis generated by the US can lead to the creation of new geo-strategic equations that will impact the present global order. Escalation of the global economic crisis can lead to exploring new economic and business paradigms. After the Great Depression the world is moving towards a new financial standard when the dollar is getting insulated. The European Union(EU) too is drifting away from the US sphere of influence. Will the world adopt the gold standard for measuring the economy or will it adopt some other currency standard? Only time will tell. One thing is clear that we have entered a new era and it is fraught with new economic and political challenges.