Trade Wars (II)
Written by Alfonso Elizondo
The risk that the World Bank sees in the current trade war involves not only Trump and the United States, but can also be applied to other countries with general price increases and shortages of basic products. It can be argued that Trump has only reacted to a very negative trade balance with China dating back several decades. Many experts think that these imbalances need to be corrected, but it is absurd to think that this goal can be achieved in just one year, when they have been accumulated over several decades, during which uncontrolled globalization was not accompanied by any type of planning.
In a way that explains why the Trump administration has chosen to attack the Chinese giant with fury instead of agreeing to gradually correct the tariff imbalances. And not only has he taken on China, but he has also done the same with other economic zones, raising the rhetoric of a trade war and threatening traditional allies with heavy tariffs, as is the case of Europe, although it is obvious that the argument used by Trump that the US has been adversely affected in its trade balance with the European powers is false.
The issue being manipulated by Trump with these actions is that economic nationalism drives heated passion, with the primary motive being to defend one’s own. The World Bank leaders say that years ago they warned the developed countries that they should correct the course so as not to reach the situations of imbalance that now exist.
The main risk now is that the current socio-economic system is being destroyed from the inside through the very elections that are rooted in our socioeconomic system. It’s a matter not only of the ballot box in the US Midwest, but also the votes of the disgruntled who are dormant in any developed country where populism is seen to be on the rise.
The underlying problem is that these voters see no other way than to adhere to easy recipes to distance themselves from a very complex economic reality, one that is at least more complex than applying lifetime tariffs, even in situations that existed before the flourishing of global international trade. It was evident that the tariff model was not going to work without ground rules to make it sustainable. On the contrary, the dislocation has been anarchic, massive and completely haphazard.
The World Bank says that a rich country with a declining economy is much more dangerous than a developing country with a little slower growth. In fact, the global socioeconomic order is now skating and reaching nowhere.
For many experts in economics and finance, current socio-economic review processes are often bumpy and destructive, so now more than ever it is urgent to use socioeconomics to arrive at an agreement between all the countries in the world and between rich and poor people. .
Addendum: In fact that is what is happening now in the world but it is not easy to see or accept it.