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Your guide on what Trump's second term for Washington, Business and the World means
Three years ago, the ports of the American West Coast, their container terminals and the rail lines desperately congested by the supposed post-cœud dislocation of the value networks, were considered the place of a deep and lasting weakness of globalization. These days, it's the opposite – Vicking Out ports While Donald Trump's prices hit the holes in the navigation schedules of China Cargos. Honestly, there is no pleasure for some people.
The first of these in fact reflected rapid recovery after access locking goods through traditional channels rather than something structurally bad. Once everyone had bought their first electric bike and stored their backwards with new garden furniture, ports (and the economy, more or less) returned to normal. If the American president moderates his pricing war against China, or if the value networks find means of “Washing China“Exports to the United States via third countries, the same is true to occur in the opposite direction. It is only if Trump is determined to maintain protection against protection to stop imports and that the economy does not recover.
In the medium term, it will be pretty bad whatever he does. Empty shelves and American children with a doll diffusion diet according to Trump New Puritanism Will be a terrible optics, and the small businesses that go due to a shortage of China inputs could offer the recession that Trump says improbable that he is fine. Ryan Petersen of the Flexport logistics company, which has become the voice of the freight industry as he did during post-comfortable congestion, says it Prices are a “type of asteroid-les-dinosaures event” for its small businesses.
But the evidence of recent years suggests that international trade and the American economy are entirely able to deal with great shocks without suffering from lasting damage. Marc Levinson, economist and historian and author of The boxThe final history of the shipping container, says that the maritime industry is in reasonable form to absorb a shock in China-US, even if this leads to a reduction in global demand rather than the reward for commercial routes. Ironically, Levinson underlines, the revenues of the maritime industry were stimulated by the blockade of the Houthis of the Red Sea sending ships with containers around the southern tip of Africa.
The shock codes of household confidence and growth caused a global recession in 2020, and the world trade in goods and services plunge. But growth has recovered intelligently with tax support and relaxation of locking. Compared to other advanced economies, especially in Europe, the United States tends to recover from recessions with Small “hysteresis” – Permanent effects on production and employment resulting from cyclical slowdowns. The unemployment rate of the United States increased to almost 15% in the spring of 2020: it was back below 4% by the end of 2021.
The question is not as long as the United States and the Trade System can absorb the shock of reference rates at 10% that Trump has imposed on almost all trade partners so far, and even much higher prices on China. Given the time, they can probably. As we saw during its trade war in the first term – and as the IMF calls “connector” economies is preparing to do now – Chinese exports are still going to the United States thanks to a combination of rebalancing or a more real change in value added to third -party countries.
The United States endeavors to repress such a bypass, but it is a huge market with a massive incentive to find a way to get around the prices. Meanwhile, these value chains with large economies of scale and susceptible to irreversible damage to shocks, including the automotive industry, are currently reasonably well protected by sculptures.
The question is whether Trump is really determined to block imports of all sources. Given their impact on trade, its prices were compared to the decision of Great Britain to leave the EU. The British government has chosen a difficult form of Brexit which has indefinitely disadvantaged its exporters (and importers) and weakened its long -term productivity, Maybe 4% – And where the frictions to exchange do not dissipate over time. Trump's equivalent would not be simply to impose stable prices and leave them, but endless to try to clog holes and restrict global imports in a way that continued to inflict damage, not only on existing commercial models but new emerging.
Where Trump comes out is someone's assumption of someone, although it is increasingly clear that many major trade partners in the United States – China, Japan, the EU – called Trump's bluff on his attempt to rebound them quickly in concessions. As he has a history of backcalls in the face of the challenge, it is a healthy development. In all cases, although the American companies exposed to Chinese trade are for a tearing adjustment in the coming months, it is only if Trump adopts a policy “everything you need” to restrict all imports that serious permanent damage are likely to be caused.
