This battle between the US and China goes far beyond market turmoil \u2013 it has killed off the liberal dream of a borderless world <\/p>\n
Donald Trump\u2019s decision to impose a 104% tariff<\/a> on Chinese imports into the US \u2013 and China blasting back with 84%<\/a> \u2013 has spooked the financial markets. The response is entirely rational.<\/p>\n Over the past few decades, phoney trade wars have been commonplace. Rival nations have squared off against each other, indulged in a bit of sabre-rattling, but eventually agreed on a deal. Headlines that screamed \u201ctrade war looms\u201d were quickly replaced by those that read \u201ctrade war averted\u201d.<\/p>\n This time it\u2019s different. The battle between the US and China prompted by Trump\u2019s tariffs is no pretend trade war. It is the real deal \u2013 and it will have real consequences. Tariffs operate as a tax, adding to the costs of doing business and raising prices for consumers. Growth will slow and inflation rates will rise. The global economy was already growing only slowly. As things stand, it is now heading for recession.<\/p>\n Trump seems prepared for this, making it clear that he is ready for some short-term pain for what he thinks will be long-term gains: a revitalised US industrial base and higher exports. This also represents a shift in approach. In the past, US policymakers have tended to take fright at big falls on Wall Street and have eased policy to limit the damage.<\/p>\n Not this time, it appears. Or at least not yet. Trump promised to impose swingeing tariffs when he was running for president last year, but the expectation was that this was just campaign rhetoric. Instead, he has delivered on his pledges \u2013 and then some.<\/p>\n Despite the obvious parallels, this is not Trump\u2019s Liz Truss moment<\/a>, where he can be forced into a policy U-turn by a sell-off in US assets. Important though they are, the market turmoil and the heightened risk of recession are only part of the story. Trade will continue despite Trump\u2019s tariffs and China\u2019s tit-for-tat response to them. Talk of the end of globalisation is exaggerated. Rather, the dawn of a new protectionist era represents the end of a particular model of globalisation, an imagined liberal nirvana in which all barriers \u2013 to movement of goods, people and money \u2013 would be dismantled.<\/p>\n This hyper-liberalised dream world has been on its way out ever since the global financial crisis of 2008, and all that was needed was a final shove, which Trump has just administered. From now on, migration will be restricted, supply chains will be shorter, hands-on industrial strategies will be back in favour, trade barriers will be removed only slowly.<\/p>\n Larry Elliott is a Guardian columnist<\/p>\n Continue reading…<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" This battle between the US and China goes far beyond market turmoil \u2013 it has killed off the liberal dream of a borderless world Donald Trump\u2019s decision to impose a 104% tariff on Chinese imports into the US \u2013 and China blasting back with 84% \u2013 has spooked the financial markets. The response is entirely … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-38362","post","type-post","status-publish","format-standard","hentry","category-blog"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/news2shorts.com\/index.php\/wp-json\/wp\/v2\/posts\/38362","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/news2shorts.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news2shorts.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news2shorts.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/news2shorts.com\/index.php\/wp-json\/wp\/v2\/comments?post=38362"}],"version-history":[{"count":0,"href":"https:\/\/news2shorts.com\/index.php\/wp-json\/wp\/v2\/posts\/38362\/revisions"}],"wp:attachment":[{"href":"https:\/\/news2shorts.com\/index.php\/wp-json\/wp\/v2\/media?parent=38362"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news2shorts.com\/index.php\/wp-json\/wp\/v2\/categories?post=38362"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news2shorts.com\/index.php\/wp-json\/wp\/v2\/tags?post=38362"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}