Stagnating global economy a very real riskpublished at 16:25 British Summer Time
Dharshini David
Deputy economics editor
A question now from David Rash, in Yeovil: “If Trump’s tariffs result in
reducing the supply of foreign goods into the US, and US exports also
reduce, will this not lead to a stagnant world economy as other countries
attempt to find new markets because the US will deter any trade?”
This is a very real risk.
The tariffs introduced by
President Trump amount to the largest such levy to face American consumers in
almost a century.
If they do get put in place – and remain – there is likely to
be a serious dent to the amount bought by Americans, still the world’s biggest
shoppers, from the rest of the world.
And those who are prepared to fork out
for higher prices due to tariffs will have less to spend on other things.
In the event of the retaliation threatened by other
countries, American exporters will suffer – hence the concern that not just the
US but the whole global economy, so reliant on trade flows, could slow.
But as you say, the natural inclination is for countries
hardest hit – toymakers from China to apparel manufacturers in Vietnam –
to boost sale in other markets.
That might appeal to consumers – but obviously,
could disadvantage businesses in those target markets.
