For a long time, the United States has led the world as the standard bearer of free trade. Clearly, the U.S. has abandoned that role since the inauguration of President Donald Trump. Indeed, the Trump administration these days is starting to destroy the global trade order. It has unilaterally imposed new tariffs on steel and aluminum imports even from U.S. allies on "national security" grounds, while waging a trade war with China by imposing 25 percent tariffs on $250 billion worth of Chinese goods.
Fortunately, no other country or region has emerged to threaten the world's trade order. The European Union, Canada, Mexico and China have taken retaliatory action against the tariffs imposed by the Trump administration — but what they launched were retaliatory tariffs under World Trade Organization rules.
That alone, however, will hardly safeguard the global trade order. The Trump administration is moving to take additional trade actions in response to the retaliatory steps by its trading partners. The U.S. and China have entered into a trade war through exchanges of retaliatory tariffs. Should the U.S. government go on to launch its threatened import curbs on automobiles and vehicle parts, the trade war could spread around the world and push the free trade regime to the brink of collapse.
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