Summary of Here is what you need to know about the risks of a US trade war

Looking for the article?
We have the summary! Get the key insights in just 5 minutes.

Here is what you need to know about the risks of a US trade war summary
Start getting smarter:
or see our plans

Rating 

8 Overall

9 Importance

7 Innovation

8 Style

Recommendation

The Trump administration’s imposition of steel and aluminum tariffs could threaten to kick off a global trade war. In this succinct and accessible overview, trade policy expert Michael Johnson – writing before the US announcement of countries excluded from the tariffs – explains why these tariffs go against World Trade Organization protocols and how the duties could damage the economies of both importing and exporting nations. While always politically neutral, getAbstract recommends this text’s authoritative insights to anyone interested in the future of global trade.

In this summary, you will learn

  • What the World Trade Organization (WTO) requires for countries to levy special import charges to protect domestic industries,
  • Why the 2018 US tariffs on steel and aluminum run counter to WTO rules, and
  • What will determine if a trade war erupts. 
 

About the Author

Michael Johnson is an adviser on international trade policy and a former UK trade negotiator.

 

Summary

President Trump’s 2018 order to impose US import tariffs of 25% on steel and 10% on aluminum has raised concerns around the globe. The term “trade war” lacks an exact definition. However, today it entails combative “tit-for-tat” retaliatory actions by the affected countries. Tariffs on imports are a staple of trade policy. Trading countries base their customs duties on a “harmonized system” that covers more than 5,000 categories of products. In some cases, nations band together to form free-trade partnerships, sometimes within blocs such as the European Union, to waive import fees, but they set fees for outsiders. “Special tariffs” are protectionist; that is, they shield domestic producers from competition and thwart unfair trade practices. The World Trade Organization (WTO) sets rules on how nations, whether or not they participate in a multilateral agreement, can apply special tariffs. Essentially, if a country determines through investigation that another country is damaging an industry by “dumping” goods into the market – by undercutting prices or subsidizing the sector ­– it may impose “countervailing” fees. Often, compromise or price increases of the imported items head off those measures.

Comment on this summary

More on this topic

Customers who read this summary also read

More by category