In recent weeks President Donald Trump has been increasing stakes with tariffs with many foreign countries. While many countries and economies have been impacted, tariffs are highest for the second largest economic superpower, China. China has retaliated with tariffs on US goods, sending the two major countries into a trade war. Tension is still building and it’s uncertain exactly what will happen. However, while this situation is escalating, many countries around the world are preparing for the worst.
Multiple Countries Prepare for Potential Trade War
In the past few days multiple central banks of multiple countries have cut their interest rates. India, New Zealand, and the Philippines all started this past week. Experts predict that more countries will follow in the next coming weeks or even days. South Korea announced a multibillion-dollar package to support South Korean automotive sector. This sector is expected to be hit particularly hard, so the country has placed subsidies and other financial helps for workers in this industries. Additionally, many countries such as Australia, Spain, and Canada are encouraging buyers in their countries to buy locally. By choosing domestic goods rather than imported goods, consumers will likely spend less and help the local economy.
While the rest of the world is preparing for the worst, China stands strong in its stance against the US. Chinese leader Xi Jingping said that China is “not afraid of any unjust suppression.” While many expect the Chinese economy to slack due to tariffs, the Chinese seem confident that they will be just fine in the long term. China recently imposed a 125% tariff on all US goods, and the US currently has a 145% tariff on Chinese goods.
Because of the crazy situation more than 70 countries are negotiating with the White House when it comes to tariffs. Vietnam has offered to purchase more natural gas or agricultural products from the states. The country also offered to reduce tariffs on its end on US products to avoid even higher tariffs that would harm Vietnams economy. This is just one example of many countries frantically trying to stabilize their economies for the future. UK Prime Minister Keir Starmer said “Global trade is being transformed so we must go further and faster in reshaping our economy.” This sentiment seems to lead many to wonder about the future of global economics.
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