Al-Jazirah daily
There is a war going on between the US and its major trade partners, the EU countries, Canada and China. The war has not abated as was expected two months ago. There were hopes that US-China negotiations would bring positive results and that the G7 Summit, which was held recently in Canada, would help members reach mutual agreement and prevent the enforcement of more international trade protectionist laws. However, on the contrary, the war has become even more raging.
The US has imposed a 25 percent tariff on $50 billion of goods imported from China and announced that the targeted imported goods are $200 billion, according to global news agencies. This means that the impact of the trade war will reach any country which the US targets and plans to impose tariffs on. The International Monetary Fund and the World Bank have expressed concern over global economic growth rates, which will be negatively affected should the trade war continue.
Reports of global economic institutions warned that the global economy might suffer stagnation by 2019. This, in itself, could be disastrous because the world economy has not yet fully recovered from the 2008 financial crisis, which cost over $70 trillion. Any global economic stagnation could lead to a catastrophic financial and economic crisis all over the world because developed countries do not have enough resources to deal with and manage a new crisis after spending 10 years attempting to recover from the 2008 financial crisis.
If the trade war continues, its negative impact will drive demand for commodities and services such as oil and petrochemicals down. Major sectors around the world will be affected negatively, causing countries huge losses and forcing them to review economic contingency plans to handle potential crises. The interest rate on the dollar will increase and this will have a negative impact for many countries that have floated their currencies.
The volume of international trade exceeds $20 trillion but this trade is likely to suffer from a slump if the trade war does not stop. The G20 should stop this war.
