As the global financial markets continue to be impacted by Trump’s tariffs, a strong international response is needed. The UK must fight back against the effects of these tariffs and work towards a more equitable global economic order.
As the UK chancellor, Rachel Reeves, has made clear in her recent intervention, the effects of Donald Trump‘s tariffs on global trade and economies are far-reaching and profound. The imposition of huge levies on imports to the US by the US president has caused chaos on the global financial markets, and it is imperative that a strong international response is taken.
A New Global Economic Order
Reeves advocates for a new ‘more balanced global economic and trading system’ that recognizes the benefits of free trade over protectionist strategies. This approach is in line with the Labour party’s internationalist stance, which emphasizes the importance of collaboration and cooperation among nations. As Reeves notes, ‘now is not the time to turn our backs on the world,’ but rather to face forward and work towards a more equitable global economic order.
Free trade is an economic policy that allows countries to trade goods and services with each other without restrictions.
This leads to increased competition, lower prices, and higher quality products for consumers.
According to the World Bank, free trade has lifted over 1 billion people out of poverty worldwide since the 1990s.
In addition, the International Trade Centre reports that international trade generates around $22 trillion in global economic growth annually.
The Impact of Trump’s Tariffs
The effects of Trump‘s tariffs are already being felt across various industries, with prices of electronic goods such as iPhones and laptops expected to spike for US customers. Experts warn that these tariffs could cause significant economic damage, particularly for small businesses and those directly affected by the tariffs.
In 2018, President Donald Trump imposed tariffs on imported steel and aluminum to protect American industries.
The tariffs were set at 25% for steel and 10% for aluminum.
This move was met with opposition from trading partners, including Canada, Mexico, and the European Union.
The tariffs were part of a broader trade policy aimed at reducing America's trade deficit.
However, critics argued that the tariffs would lead to higher prices for consumers and harm industries reliant on imported materials.
A Collective Response from Key Trading Nations
Former British prime minister Gordon Brown has emphasized the need for key trading nations to step up their collective response to the chaos unleashed by Trump‘s protectionist policies. Brown argues that an economic coalition of the willing is necessary to safeguard jobs and living standards in an interdependent world.
New Measures to Support UK Businesses
In response to the uncertainties caused by Trump‘s tariffs, the British government has announced new measures to support UK businesses. A multibillion-pound increase in government-backed financing will give UK Export Finance the power to expand financing support for British businesses by £20bn. Small businesses will also be able to access loans of up to £2m through the British Business Bank’s growth guarantee scheme.
The Public’s Perception of Trump
A recent poll has revealed that more than half of adults believe US president Donald Trump is not ‘a friend of Britain’s.’ Views of Trump are becoming increasingly negative, with a significant majority believing he is not trustworthy. This shift in public perception highlights the need for a strong and coordinated response from key trading nations to address the impact of Trump‘s protectionist policies.
Rebuilding Trade Ties with the EU
Research commissioned by the internationalist thinktank Best for Britain has found that a majority of UK voters want the government to concentrate on rebuilding trade ties with the EU over forging a new economic deal with the US. The analysis shows how far the UK public has turned back in favour of the EU since the Brexit referendum nine years ago, with 53% believing a closer relationship with the EU will have a positive effect on the UK economy.
Conclusion
As the global financial markets continue to be impacted by Trump‘s tariffs, it is imperative that a strong international response is taken. The Labour party’s commitment to free trade and collaboration is evident in Reeves‘ call for a new ‘more balanced global economic and trading system.’ By working together and fostering closer ties with key trading nations, we can build a more equitable and prosperous future for all.
Global trade agreements are frameworks that facilitate international trade by reducing tariffs, non-tariff barriers, and regulatory differences.
These agreements aim to promote free trade, economic growth, and cooperation among nations.
The 'World Trade Organization' (WTO) is a key player in shaping global trade policies.
Notable examples of global trade agreements include the North American Free Trade Agreement (NAFTA), the Trans-Pacific Partnership (TPP), and the European Union's Single Market.
These agreements have led to increased trade volumes, job creation, and economic integration among participating countries.
