WTO: Global trade war harms the US and the global economy strong

WTO: Global trade war harms the US and the global economy strong

The global economic conditions are facing challenges this year, in particular through President Donald Trump's trade war. A new report by World trade organization (wto) Especially North America. This region, which is dominated by the USA, will experience a stronger decline than other areas.

economic effects of tariffs

The tariffs recently imposed by Trump and the retaliation measures initially initiated by other states have significantly worsened the prospects for global trade. WTO expects the entire global trade to shrink by 0.2 %, in contrast to a growth forecast of 2.7 % without tariffs.

connections between trade and personal prosperity

The global economy and thus the finances of people are closely linked to the trade of goods and services between the countries. A shrinking economy usually leads to fewer (and poorly paid) jobs, financial difficulties for the population and difficult decisions for companies and governments regarding their expenses.

forecasts for economic growth

The WTO assumes that global economic performance will grow by 2.2 % this year. This would be 0.6 percentage points lower than the value that the WTO would expect in a scenario without additional tariffs. In North America, economic growth is expected to remain 1.6 percentage points behind the expectations.

The situation of China in the trade war

crystalina Georgieva, the president of the international monetary fund, pointed out that more than a billion people have risen out of extreme poverty in the past 40 years, while worldwide trade flourished. If Trump now his so-called "mutual tariffs" according to the 90- day With the general uncertainty about trade policy - this leads to the volume of the traded goods by 1.5 % more, according to the WTO.

China's reaction to customs policy

However, Trump has excluded a nation from this break: China is subject to 125 % of his goods exported to America, in addition to the 20 % comprehensive customs, which Trump recently raised to Chinese products. According to the WTO, China could redirect its products, which were originally intended for the United States, to other countries. The WTO expects exports of Chinese goods to all regions outside of North America by 4 % to 9 % this year, which could lead to increased competition in these markets.

uncertainties in global trade

uncertainties in global trade put a strain on the economy, the WTO argues in its report. "If the uncertainty with regard to future tariffs or trade relationships increases, companies could delay or reduce investments. This in turn reduces the trade flow and ultimately (has a negative effect)."