‘Tug-of-war’
Critics say US businesses and consumers could bear the burden if importers pass on the cost, adding that the policy could increase risks of a recession.
“If this trade war continues through Labor Day (on Sep 1), the US economy will likely suffer a recession this year,” Mark Zandi, chief economist of Moody’s Analytics, told AFP.
Trump’s long-awaited announcement is also causing global turmoil, with stock markets jittery for days and countries in the crosshairs scrambling to decide how to react.
European Central Bank President Christine Lagarde warned Wednesday that whatever steps other countries take “it will be negative anyway the world over.”
America’s neighbors Mexico and Canada, whose economies are closely linked with the United States, are those that could suffer the most from a bruising trade war.
“I understand that it’s a game of tug-of-war,” truck driver Alejandro Espinoza told AFP as he waited in a queue to cross the Mexican-US border. “But unfortunately, we’re the ones who pay in the end.”
Major economies have however vowed retribution
The European Union will react to new Trump tariffs “before the end of April,” said a French government spokeswoman.
