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The politics of Chaos

Trump's protectionism demands that Europe reinforce its financial defense

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The politics of Chaos

Donald Trump has started a spiral of commercial aggression that will be very difficult to slow down in future. By imposing tariffs worth 34 billion on Chinese products — and receiving reciprocal punishment of anor 34 billion loaded on American products — and threatening new protectionist actions against Beijing, it is inflicting serious damage on World economy. First of all, to your own country, because a lot of Chinese products taxed are supplies or components that are mounted in United States, for alarm and irritation of a part of entrepreneurship. In addition, it sows panic in international trade; Any economic area can be signaled to-morrow by arbitrariness of Trumpism. World trade becomes hostage to chaos that President Trump wants to sow, with no more argument than most rancid mercantilism: America wants to reduce, because yes and whatever, its trade deficit of 375 billion dollars with China, without having in It counts or magnitudes of its external balance.

We must remember three destructive aspects of this policy, orphaned by rest of rational explanation. When economic and business logic is imposed, turn back of protectionist phase will be complex and costly in domestic political terms, because part of electorate defends tariffs while not directly suffering its consequences. It also cuts global growth, a reduction that in turn induces reflex movement of more protectionism. Nothing better defines chaotic strategy of current American administration than an astonishing phenomenon: while Trump curtails free trade with tariffs to defend American employment, dollar is appreciated in markets. So benefits that American economy can get through door end up losing m out window.

Previous Editorials

Six against one (08/06/2018)

Trump's trade War (04/06/2018)

Trump chooses Chaos (26/03/2018)

Trump is pursuing a policy of intimidation — "harm neighbor" — of a real estate negotiator. The most serious problem, after which causes massive injection of concern in international markets — places debt and bags at very edge of collapse that can come from any disturbance that would be trivial in terms of stability — is that re Differentiates between allies and opponents. Worse still, he is mistaken for friends and enemies. Trump and his advisors should realize that it is not easy to contain damage caused by protectionism in strictly economic area without overflowing to more dangerous ones.

Europe, euro area, has to act accordingly with Trump's consummate facts. It is well to protest against WTO, but it is more useful to follow advice of ECB president, Mario Draghi: We must arm euro area institutionally. Trump's economic nationalism should be taken as a spur in race to create a common deposit guarantee fund and a common stabilization fund. These are minimum safety conditions in global economic disorder imposed by Trump.

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