Trump’s big day

The Trump administration launched a global trade war this week with a tranche of tariffs on most countries – including the United Kingdom. Trump announced a 10 per cent baseline tariff on all imports wherever they come from and higher rates on a number of countries whom he deemed the “worst offenders” in terms of imposing tariffs on American goods. Britain is in the 10 per cent general band. Even the uninhabited Heard and McDonald islands, a remote Australian outpost near Antarctica, is on the basic rate – even though the population consists largely of seals and penguins.
A few,  devoid of any meaningful trade with the USA like Belarus, Cuba, Democratic Korea, Iran and the Russian Federation, get off scot-free. Others were not so lucky. Cambodia tops the list at 49 per cent and Vietnam is second on 46. People’s China gets 34 per cent, pushing their overall tariff to a stomping 54 per cent,
Tariffs are used by the capitalists to boost domestic manufacturers and punish those from other countries whose interests conflict with theirs. A tariff is essentially a tax paid by companies who import goods from the targeted countries. This is then normally passed on to the consumer in higher prices. The Trump administration seeks to “Make America Great Again”, largely at the expense of its own allies, and boost American manufacturing through tariffs and protectionism while using secret diplomacy and economic blackmail to achieve its goals. 
By turning trade into an over-simplistic tit-for-tat game, the Trump administration is dismantling a global trade system based on efficiency, specialisation and mutual benefit and hurting both the US economy and the global economy at large. The idea of “reciprocal tariffs” is particularly misguided. The principle of comparative advantage allows countries to focus on what they do best and trade for the rest. Ignoring this leads to economic inefficiencies. 
Despite Trump's claim that higher tariffs will help bring in revenue for the government and revitalise American manufacturing, economists have warned that such measures will push up prices for US consumers and businesses, disrupt global trade, and hurt global economy.
European Union chief Ursula von der Leyen called Trump's tariffs a "major blow to the world economy"  while People’s China promises counter-measures. China “will take necessary measures to resolutely safeguard its legitimate rights and interests" a Chinese Foreign Office spokesperson told the media in Beijing this week saying that there is no winner in a trade or tariff war, and that protectionism offers no solution.
On the White House lawn Trump said this was “Liberation Day” holding up a board showing the rates he was imposing on different countries throughout the world. He said a “golden age” was coming back the United States.
That wasn’t the view in the money markets of New York and the City of London as shares of the multinational companies tumbled when they heard the news. Crude oil, Big Tech stocks and even the going rate for the US dollar against other currencies fell. Even gold, which hit records recently as investors sought something safer to own, has dipped.
As big brands lose their value in early trading and shares crash on Wall Street many fear that far from heralding a new era Trump’s draconian protectionist measures will simply trigger a trade war and another global capitalist slump.