2018 review: the year the trade tariff bit back
"Trade wars are good and easy to win!"
"Tariffs are the greatest!" "We are the 'piggy bank' that’s being robbed"
"I am a tariff man! When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so"
In 2018 Donald Trump started a full-scale Trade war. He announced the US withdrawal from the NAFTA deal, imposed steep tariffs on goods from the European Union and slapped duties on billions of dollars' worth of China’s imports.
There were several rounds of tit-for-tat tariffs and trade talks between China and the US in 2018. And only when the two presidents sat down face-to-face at the G20 summit in Argentina did investors get a little hope that progress was possible.
It was the same cautious optimism when Donald Trump met Jean-Claude Juncker in the summer. The President of the European Commission headed to Washington when the US imposed steel and aluminium tariffs and threatened new duties on the car industry.
The only permanent trade deal signed by the US President in 2018 was the new US-Mexico-Canada Agreement which replaced NAFTA after the US withdrawal.
But one trade deal for three conflicts isn’t enough to cheer up the global economy: growth has slowed in 2018.
In the words of Christine Lagarde, the IMF's Managing Director:
"More than ever before, at least, as was demonstrated in 2008, what happens in one nation can impact all nations. Think about it: from weapons of mass destruction to cyber-security to the interconnected financial system, many of our current challenges recognise no borders. So, when support for international cooperation falters, we must remember the lesson the United States and her allies taught the world over the last 75 years: It’s a big lesson - solidarity is self-interest."
2018 will be remembered for the year of trade tensions and conflicts, therefore in 2019 we can expect to see plenty of talks to try and resolve them.