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More China tariffs could push the US into a ‘Trump recession’

recession ahead
The Effects of on the Global Economy
recession ahead
For the last 36 months, Beijing-Washington trade wars have dominated news headlines across the world. The trade wars between the two big economies have attracted a lot of speculations. However, the dominating thoughts in this trade war either support Washington’s approach to the Chinese effect on the global economy or supports China’s model of business and calls for an open market view.


One of the dominant views on Trump’s approach to China (and the Chinese effect) is that his policies will create a recession, currently nicknamed as ‘Trump recession.’ Gary Shapiro — one of the people that are against economic fences — believes that the Washington decision is not a well-thought approach. Representing the Consumer Technology Association, he believes that there are different ways the Trump administration can handle trade differences between the two countries — and not taxing consumer goods.

Gary Shapiro also believes that the trade wars will also create a spiral effect on the USA industries — even those that do not deal with consumer goods. Although the Trump administration is still defensive on its policies (both proposed and existing policies), Shapiro believes that the two countries can solve the misunderstanding and save consumers the agony of high taxation and unpredictable future in technology. Myron Brilliant — who represents U.S. Chamber of Commerce in this discourse — also agrees with Shapiro.

Myron Brilliant is more concerned about the uncertainty — created by tariffs and geopolitics. In an exclusive interview with CNBC, he confessed that the trade wars create fertile grounds for recessions. He is one of the professionals that are against the weaponization of tariffs by the current regime. Myron is, however hopeful that the two governments (China and the USA) will find a long lasting solution. Myron is also optimistic that the G-20 meeting in Japan will also create a sustainable solution to trade wars.

However, Gary Shapiro has a different view on Myron’s hopes that G-20 meeting will create a long-lasting solution — especially after the Huawei ban in May. Shapiro believes that the ‘Huawei factor’ kills hopes of a smooth transition to normality after the ban on the Asian tech giant. He points out that the Chinese company had a good relationship with U.S. tech companies, and the ban will create both long term and short-term effects. One of the significant effects on the Asian tech giant is that the ban will slow down the company’s growth —, which is currently second to Samsung in terms of global sales.

However, Shapiro points out that although the move will lock China out from the world of technology, it will affect the USA position in the technology world. The move, according to Shapiro, also prepares the Chinese companies to look for alternatives and therefore, not to buy from the USA owned chip companies. Therefore, instead of propelling the USA to be the global leader in technology, the move will create many alternatives in the tech market and therefore creating an unpredictable future.

Lastly, Shapiro believes that in case the two countries fail to reach an agreement to remove the trade tariffs, the future of the global economy, especially the tech economy, is unpredictable.


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