07:33 GMT +321 August 2018
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    Trump Trade Tariffs: Bye-Bye to Big Trade Blocs

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    Andrew Korybko
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    Trump's imposition of his promised steel and aluminum tariffs has sparked outrage from America's economic allies, endangering the prospective Transatlantic Trade and Investment Partnership (TTIP) and potentially spelling the end of NAFTA.

    The era of big trading blocs appears to be over as Trump's protectionist measures saw him first pulling out of the Trans-Pacific Partnership (TPP) in the early days of his presidency and now shake the foundation of the United States while making it all but impossible to replicate this model in the EU.

    Although only targeting a comparatively small percentage of international imports, the symbolism of this move is being interpreted as a formal declaration of a trade war, one which will inevitably draw a response that could easily provoke a self-sustaining cycle of economic tensions within the West. This would naturally have global implications given the interconnectivity of the world system, potentially creating long-term opportunities for China and other Asian economies despite the short- to medium-term challenges that this could pose for North America and Europe.

    Interestingly, Eastern economies are eager to enter into the same sort of multilateral trading blocs that the US is de facto withdrawing from, which might lead to them increasing their market share all across the West, though provided that the so-called "Trump Effect" doesn't set off a global wave of protectionism that offsets these plans, particularly China's "One Belt, One Road" initiative. The US is nevertheless one of the world's largest and most profitable marketplaces, so it's impossible for it to be ignored even by the same countries that it's spiting.

    Washington wants to negotiate bilateral trade deals that strictly regulate goods and services in order to prevent NAFTA-like "backdoor" loopholes from being exploited by Beijing and others; though the countries that need the American market the most might not be able to ever clinch these preferential agreements if they enter into similar ones with China, which the US believes would preclude them from "safely" trading with it on that level out of the same concerns for "economic security" that triggered Trump's tariffs to begin with.  

    The world is therefore at a crossroads between big trading blocs and bilateral trade deals, the outcome of which will ultimately determine the success of China's Silk Road initiative and the US's new trade policies.

    Adriel Kasonta, a foreign affairs analyst based in London and Joaquin Flores, editor in chief of Fort Russ News and director of the Center for Syncretic Studies, commented on the issue.

    Want to sound off and share what you think about this? Send us an email at radio@sputniknews.com or find us on Facebook!

    Tags:
    trade bloc, tariffs, trade, NAFTA, Donald Trump
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