Trade War in the United States: Implications for the Future of the Global Economy and the U.S.-Mexico Economic Correlation

President Trump’s sweeping tariff announcement Wednesday triggered a sharp drop in U.S. stock markets, a flashing-red warning sign of the economic fallout that’s expected to result from the widening trade war.

Around midday Thursday, the Dow Jones Industrial Average had tumbled over 1,200 points, or 3%. The broader S&P 500 lost 4% and the tech- heavy Nasdaq dropped nearly 5%.

Trump has ordered a minimum, 10% tax on nearly all imports starting this weekend, with much higher tariffs on goods from dozens of countries, including some of the United States’ closest allies. The European Union will have a 20% tariffs, while Japanese goods will be taxed at 24%.

The new taxes will result in higher prices and weaker growth in the United States, which will probably prompt many other countries to enter a recession.

The import tax in the U.S. was increased by nearly nine-fold last year. After the US stock market closed, the scope and size of the levies were announced.

“This is a game changing thing for the U.S. economy and the global economy, if the rate stays on for a while,” wrote Sonola of FITCH Ratings.

WangDong is an expert in international relations, and he argues that Trump is using tariffs to pressure countries into making deals, and if that isn’t successful, he raises the stakes.

“We’re going to produce the cars and ships, chips, airplanes, minerals and medicines that we need right here in America,” Trump said Wednesday in the White House Rose Garden. If they don’t come back to our country, we’ll have a large tax to pay.

Many factories are bracing for a loss of export markets due to the trade war, which is supposed to benefit domestic manufacturers. Trading partners have already promised to retaliate with tariffs of their own on U.S. exports.

“Here it comes and we’re already seeing that,” said Tim Fiore, who conducts a monthly survey of factory managers for the Institute for Supply Management. “The retaliatory tariffs are going to be really ugly. It’s just going to kill demand.”

The U.S. launched a similar, worldwide trade war in the 1930s. It didn’t end well. The Great Depression is thought to have worsened by the notorious Smoot-Hawley tariffs.

“It was bad for consumers, because it meant higher prices,” says former Treasury Secretary Larry Summers. It meant higher input costs so it was bad for producers. And it was bad for peace, because it undermined comity among nations.”

But that’s not to say that any of Trump’s tariff calculations arrive at the right answer. For one, these are very rough, back-of-the-envelope calculations. As laid out, this formula treats every trading partner, every good and every industry the same. It does not matter what a country ships to the US, as long as it is bananas, oil, clothing, computers or cars.

According to Trump’s calculation, the tariffs are supposed to raise prices. Because those higher prices are the driving force that will close the trade deficit.

This is contrary to Trump’s previous public statements, where he has variously denied that tariffs would raise prices or has said that he “couldn’t care less.”

There’s a clear approach behind the Greek letters. The equation was created to answer the question of how high should the tariffs be in order to get Americans to buy fewer foreign products. This math says that if the US has a trade deficit with another country, the higher the tariffs should be on that country’s products.

Certainly these new tariffs are not “reciprocal” tariffs. The math behind them is neither completely invented nor nonsensical as has been claimed online.

The president sparked an economic mystery when he announced his tariffs on Wednesday. Where did those numbers come from?

Will Trump’s tariffs close the trade deficit? Maybe, maybe not. But finally, at least, the administration has shown its work. The tariffs are designed to raise prices and close the trade deficit, according to their calculations.

The Time for a Just World: China’s Strategy for Bringing Back the Muppet to the U.S, as outlined by Xie Tao

“China must more strictly distinguish which of its foreign interests are truly core, and which ones can be reduced or even eliminated,” he says. We need to reduce China’s burden by focusing on issues that are important to China.

Some people who watch America from China feel that the new administration may offer opportunities but that they are wary of China’s appetite for America’s lunch.

The U.S. and China also signed a deal in January 2020 to lower China’s trade surplus with the U.S., but it quickly fell apart, suggesting, Shi says, that China will be skeptical of any attempt by Trump to strike another such deal.

People’s University professor of international relations Shi Yinhong, who has been a visiting scholar at four American universities since the 1980s, is even more skeptical of any opportunity.

“I do think there’s a window of opportunity for both sides to really strike a deal, which is I think three to six months,” in Trump’s second term. Trump would be tempted to change his approach if that window of opportunity is gone.

This means, he says, “that you behave very cautiously on the international arena. You don’t want to overextend yourself. You don’t want to make promises that are impossible to fulfill.

“Look at the breakdown of foreign aid projects” he says. It appears that China has an opportunity to present its own version of a just world.

Xie Tao, dean of the School of International Relations and Diplomacy at Beijing Foreign Studies University, who received his Ph.D. from Northwestern University in 2007, also sees an opening for China.

“I’ll be speaking to President Xi. I have a close relationship with him. We’re going to have a very good relationship, but we have a trillion-dollar deficit because of Biden,” Trump told reporters in the Oval Office on March 21.

He says Napoleon told him not to do anything to disturb him when he was making a mistake. “So I think China’s strategy will be more of a tranquil waiting.”

Wang believes that there isn’t need for China to be in a hurry when things are good in the U.S.

Unlike older Chinese, Wang did not live through the economic hardships and political campaigns under the rule of Chairman Mao Tse-tung. Wang came of age during China’s reform era, when the country was relatively open, and the economy grew rapidly.

The American Roulette: What Do Chinese Americans Think About the U.S. and How They’ve Learned about Its Cultural Implications

BEIJING — From slapping tariffs on America’s friends and foes alike, to the dismantling of foreign aid and retreat from international institutions, the Trump administration’s actions have been criticized for creating a global leadership vacuum that will be filled by U.S rivals, especially China.

It is not unusual for America watchers to feel that the U.S. changes are related to their personal views of the U.S.

Zha graduated from the University of South Carolina and Columbia University in the 80’s after Beijing began allowing students to study in America.

Zha is one of China’s liberals, who used to “look up to America as a role model to help change China in the more democratic direction.” Recent developments in America under the Trump administration, she says, “have been really shocking and bewildering and in some sense disillusioning.”

But for the Chinese state, she says, “it’s definitely an opportunity, because what’s happening in the U.S. does a better job than state propaganda could do to demonize America as, you know, a phony democracy, which really is an imperialist power.”

Wang Haolan, who was born in 1997, is a Chinese who has never seen the US as a beacon. “I have never believed the U.S. was that great,” he says. The name of his popular podcast, The American Roulette, hints at this view.

The U.S. action undermines the self-interest of the U.S. and harms the development of the global economy and the stabilization of production and supply chains.

“China urges the United States to immediately cancel its unilateral tariff measures and resolve trade differences through consultation in an equal, respectful and mutually beneficial manner,” the statement concludes.

The China-US Trade War, the WTO Controversy, and Implications for X-ray Tubes and Related Medical Devices

The ministry of commerce imposed controls on seven types of rare earth minerals. They include samarium (钐), gadolinium (钆), terbium (铽), dysprosium (镝), lutetium (镥), scandium (钪) and yttrium (钇).

The country added 11 American businesses to its unreliable entities list because they are accused of military and technological cooperation with Taiwan. The new additions, mostly made up of drone and defense companies, include drone manufacturer Skydio, which started making out consumer drones but pivoted entirely to enterprise in 2023.

“No export operator is allowed to violate these provisions if they’ve behaved in a way that may jeopardize China’s national security and interests,” the statement said.

China’s commerce ministry said on Friday it is adding 16 U.S. entities to an export control list, banning them from acquiring Chinese products designated as dual-use, for civilian and military purposes.

“This is an aggressive, escalatory response that makes a near-term deal to end the trade war between the two superpowers highly unlikely,” its analysts wrote in a note.

The WTO dispute complaint that China lodged in February follows Trump’s tariffs on the country, and China has now filed a lawsuit against the organization.

China is launching investigations into X-ray tubes from America and India because of concerns that they may have been hurt by being exported for less than their domestic price. If that sounds oddly specific, bear in mind that the US dominates international medical device trade.

The Chinese levy will go into effect on April 10th, one day after the US’s new tariff starts to apply. China has also imposed strict limits on the exports of some rare earth elements that are mined almost exclusively in China, used in electric vehicles, weapons, and other tech.