A Liverpool economist has said that America’s US Trade War being could create a world not seen since the 1930s’ Great Depression.
The Trump administration has imposed a 25% tax increase on steel and aluminium exports as well as products that use the metals that are exported to the US, potentially impacting a wide variety of manufacturing exported from deep sea ports like the one in Liverpool.
Dr Balázs Muraközy, a senior lecturer of Economics at the University of Liverpool, has warned against the damaging effects of America’s new trade policy.
He said: “The unilateral trade policy conducted by the Trump administration and the trade war it generates can be very harmful for every country involved, both in terms of falling employment and increasing prices.”
“If the UK retaliates, it is likely to impose tariffs on sectors in which the US exports much to the UK.”
America is Liverpool city region’s largest export market worth nearly £2 billion a year.
Last year Liverpool’s Metro Mayor Steve Rotheram visited New York to reinforce the city’s historic ties to America.
He said: “We have strong links through our shared histories and our unrivalled music, sport and culture which attracts tens of thousands of US visitors each year.
“I’ve pledged to boost foreign direct investment by 25%, creating jobs and prosperity for local people, and I’m determined to do whatever it takes to make that happen.”
However, following the new American administration’s economic policies, this plan seems to be all but impossible.
With the European Union, China, Mexico and Canada all considering implementing retaliatory measures against the tariffs imposed on them by the United States, there have been calls for the UK to do the same.
When visiting the White House last month, and trade very much on the agenda, Prime Minister Keir Starmer sought a new trade deal and possible exemption from America’s tariffs.
Following the talks, the Prime Minister insisted he had tried to convince the American President not to impose tariffs on the UK.
However, whatever those talks were, they seem to have been inconsequential following the tariff announcements.
When asked during Prime Minister’s questions last week what the next steps of the government were, Starmer said: “we will keep all options on the table.”
With international market uncertainty, Dr. Muraközy suggested the UK should seek more assured trading with cooperative countries while also looking to retaliate to the imposed tariffs.
He added: “In the long term, the UK would benefit from the return of rule-based international trading system.
“In the short run, if negotiations don’t work, there could be a need for some kind of retaliation.”
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