USA: US has already lost the commercial war – ABN amro

One of the main objectives of the Trump administration policies is to become less dependent on China, but the implementation of policies is poorly aligned with the general objectives and is too erratic. The commercial war harms everyone, but harms the US more than other great economic actors. The price of Chinese decoupling is higher than only inflation: USA. It runs the risk of losing control of the global financial system, says ABN ABN economist Rogier Quaedvlieg.

USA risk its financial domain in search of manufacturing

“Trump and his advisors have raised three apparent objectives of this commercial war: relocate manufacturing, increase income to reduce the deficit and obtain better (commercial) agreements. If the objective is to bring the manufacturing back to the US through tariff policies, you would like frequent reversions and delays. “

“Recent developments point to growing evidence that the main US business partners, and particularly China, have the advantage. Most of the recent changes in tariff policy were to undo previously applied tariff USA. “

“Finally, while China controls global manufacturing, USA controls the global financial system. When trying to bring manufacturing back and reduce its dependence on China, the US is destroying its reputation and runs the risk of losing its dominance of the financial system, perhaps even in favor of China. Tariffs can get rid of quickly, but recover the confidence of the world will take much longer.”