The United States business partners have few good alternatives in their trade war with President Donald Trump, as well as asking for peace.
Reached by 10% to 50% customs on their exports to dominant economic superpower, most people have no firepower to avenge or political will to fight, says government officials, economists and trade with experts.
That is why the vast majority of business partners did not immediately retain and indicated to negotiate an agreement to preserve performances with Trump. Even among those who took a contract, the door was ajar for negotiations.
From China, As this Friday used extra 34% on all US productsto Canada, that adopted limited retaliationCountries should sit at the negotiating table sooner or later, as US consumption is very important globally – two -thirds greater than the Consumption of European Union, according to the World Bank’s tasks.
In addition to negotiations, governments have limited alternatives to protect their export industries and economies in general.
This includes expenses for state-owned or broader economic stimulus spain announced a $ 14 billion support package ($ 15.5 billion) on Thursday or search for more green pastures for trade. German authorities keep an eye on Mexico, Canada and India.
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But for a world that has already dropped in public debt after several years of expenses for pandemic stimuli, it will be difficult for some to finance subsidies and other financial support needed to avoid lower economic growth or redundancies.
Economists expect Beijing to release more fiscal stimulation to support their finances, which sell goods worth more than $ 400 billion per year to the United States. The Asian country will also try to develop other export markets, according to Chinese political advisers.
“We must strengthen our coordination with ASEAN, Japan, South Korea, the EU and the United Kingdom,” said a Chinese adviser, talking about anonymous condition because of the sensitivity of the subject. Association of Southeast Asia Nations (ASEAN) collects a group of Asian countries.
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Trump’s “liberation day” interest rates raised the Chinese export tax to 54%.
Even with China’s economic arsenal – its economic power, domain for the production of minerals and essential metals for advanced industries and centrality in global supply chains – a traded ceasefire is expected, says the commercial consultant.
This may take a while, given the enmity between Washington and Beijing, although there is speculation that Trump and Chinese President XI Jinping may meet in the United States in June.
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Economic shock
Countries that do not have China’s power can reach the table early.
India, which is affected by a 27%duty, is already in negotiations and does not consider retaliation, says a government official. She made concessions to Washington before the last customs and is open to lower interest rates by more than half of the US imports worth $ 23 billion in a first phase agreement, says government sources.
Vietnam should also prioritize negotiations, with limited scope for subsidies and commercial diversification. He could try to take advantage of the exhibition that some US manufacturers need to Vietnam to push the Trump administration, according to Leif Schneider, head of the Luther International Advocacy Office in Vietnam.
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But he added, “Vietnam will probably prioritize negotiations to avoid financial shock.”
The network with a 46%degree is the country the sixth largest exporter to the United States, thanks to its success as an outsourcing option for manufacturers diversifying outside China.
Southeast Asia in general has nowhere to run. His efforts to deepen trade in China, Japan and other big neighbors have led to a soup with commercial group letters that make it easier for trade, but looks good in compensating for a commercial American shock.
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Before the announcement of Trump, China, Japan and South Korea made their first economic dialogue in five years and tried to increase regional trade. But there is skepticism that this goes a long way, mainly because these three export powers, not floating contributors to global demand.
Terminations began
The European Union, which already feels abandoned by the Trump administration on security, said that the common market of 450 million people was ready to repay the 20% Trump interest on the Block and also looking at other markets.
“Forming alliances … It’s the order of the day,” said German Economy Minister Robert Haback and emphasized Mexico, Canada and India, where the narrowest trade conditions would make sense.
But trade agreements can take time – time like Europe and others do not have. The EU and block Mercosur, from South America, talked for 25 years before revealing a free trade agreement in December. Trump’s mutual tariffs will take effect on Wednesday.
It also takes time to reconnect an economy to handle global protectionism, which is what German economists say that is the right answer. The structural reform, such as more competition and technology investments, is preferable to stimulation, they say.
“There is not much that fiscal policy or monetary policy can do in the short term to compensate for commercial shock,” said Deutsche Bank Robin Winkler Economist.
The German bank Berenberg says that most new US fees can be reversed in negotiations, with Europe that offers concessions, such as more contracts for US defense companies.
Canada has been spared additional duties this week, but recovers from previous US prices of 25% of the United States over its car exports, steel and aluminum. The country is wasting subsidies, funded by its own revenge duties, but the pain still feels.
European car manufacturer Stellantis NV said on Thursday that it would pause production at a Canadian parish factory. And the companies have reported that layoffs have already started and sought new markets.
Some countries have complained to the global trading judge, the World Trade Organization (WTO), but this is considered a weak alternative by experts, mainly because Trump has paralyzed his main bank for appeals during his first term. Geneva’s body is also not seen as a probable place to negotiate customs disputes.
“If they continue to promote protectionism and maintain this one -sided perspective, I do not see them return to the WTO for multilateral negotiations at any time soon,” said Marco Molina, from the consulting company Molina & Associates and former Deputy Representative of Guatemala in WTO.
“And it’s a shame, because WTO has literally been created to solve problems like these.”