The world’s leading economists have called on the US to pull back from a full-blown trade war, warning it could have ruinous consequences for the country and wider global economy.
Every one of the 43 economists polls in Chicago Booth University’s IGM Forum disagreed with the statement that increased tariffs on imports would “improve Americans’ welfare”.
They also agreed that proposed aluminium and steel tariffs of up to 25% would hurt far more Americans than they would help.
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The measures have drawn a stinging response from the US’s major trading partners, namely China and the EU, which have threatened a series of tit-for-tat tariffs on iconic US brands such as Levi’s, bourbon whisky and Harley-Davidson motorcycles.
The Daily Telegraph says the decisive survey is “a sharp rebuke” to US President Donald Trump’s claim that “trade wars are good, and easy to win”.
Economists at ING have calculated that a 1% rise in the price of all imports into the US and into the EU would boost domestic production in the US by 0.07% and the EU by 0.1%, but hit the wider economy to the tune of 0.36% and 0.28% of GDP respectively. “As a result,” the Telegraph argues, “any benefit of the tax is more than outweighed by the damage inflicted.”
A separate survey of economists conducted by the Wall Street Journal last week found Trump’s proposed tariffs would lead to job losses, “as gains in the domestic steel and aluminium industries would be outweighed by losses in sectors that purchase those metals”, amid wider concern foreign-trade disputes could escalate and damage the US economy.
Several key pro-free trade Trump advisors, including his top economic advisor, Gary Cohn, have departed over the past few weeks, raising fears the White House could become even more protectionist.
