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Russia was dragged into a new war: the country will face serious economic losses

Россию втянули в новую войну: страну ждут серьезные экономические потери

World trade shakes. The United States announced readiness to blow up the existing order. Already entered the U.S. duty on goods from China, the metals from everywhere. Can be imposed duties on cars. China, the EU, other countries impose retaliatory duties against the United States. Do not stand aside and Russia. What’s next?

Dug up the Tomahawk of war Donald trump. In his election campaign. American voters supporting it, strictly speaking, gave the green light and war. However, there was hope that pre-election populism is one thing and real politics is another. But trump, new to politics, chose to be guided by the principle that the candidate has said — the President did. Selected his own economic Advisor to Gary Con was trying to convince the chief that the introduction of trading fees and the inevitable in this case, the global trade war is contrary to the interests of the United States, but did not succeed, which forced him to resign in early March, 2018.

 

The first sight of the tramp was China. March 23, 2018 the U.S. President signed a Memorandum, without any diplomatic or simply bureaucratic cover named “On fight against economic aggression of China,” it was clearly a Declaration of war. On the American volleys of duties covered, and other countries, including its closest allies. For retaliatory action is, as expected, did not. China, for example, has officially stated about the readiness to introduce “controlline” on 2 April. After a short pause, which gave a hope for truce, in July, the toll on both sides was introduced.

For a long time and everyone knows the truth: any war is much easier to unleash than to stop. So why is this trade war trump was unleashed?

Now the fashion argument that the era of globalism is completed. Change of preferences free trade for old, and someone seems to good to protectionism — one of the clearest manifestations of this process. It would seem that the evidence of loyalty to such a position has no weaknesses. This is the crisis of the European Union, sharp passing and lethargic phase, and Brickset himself Donald trump.

In fact, however, all is not so simple. The story never develops in a straight line. Globalism has always existed, just the name is relatively recent. Accordingly, this process had different stages and speeds. Neither Trump nor the English voters “who returned his country to itself”, nor the Russian apologists the only true “teterinskoe” ways of development of globalization not to cancel. Another thing is that this process, like any other, can survive the crisis and retrograde motion.

If we go back to Trump and a trade war, the American President — not a principled opponent of free trade. For him the most important thing is not protectionism, and America’s interests.

Former US presidents satisfied the established economic order in which their country was the first in the global innovation process was the emission center of the world currency, reinforcing all of this military-political power. Trump also focused on the fact that the US has huge trade and payment deficit. While the United States imported products, created by the American developments, but manufactured abroad. David Ricardo and other economic classics, to justify the objective nature of the division of labor and its benefits for all the parties, trump the American way did not read. But he decided innovation and emission benefits USA Supplement industrial. The idea is as bold as they are by and large meaningless. It is in a sense, turns back time. Any revanchism risky.

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Always important not only policy, but also how they are implemented. With this trump a big problem. He brought to politics his style of business expansion. Roughly speaking, it is, first of all to intimidate the competitor threats that do not skimp, and then from a position of strength to enter into negotiations and begin to negotiate. Trump is a billionaire, and probably has reason to believe his experience as a successful businessman. But as the President he is to present success is not possible. Threats of imposition of duties was not limited.

 

The world trade organization (WTO), which appealed to all participants in the outbreak of a trade war, to stop her failed. There is a direct analogy with globalization. As trumpalaike don’t deploy globalization, although it can suspend and WTO, once in the crisis unleashed by the trump global trade war, is not an unrealistic or unnecessary organization. You can cite another parallel: the League of Nations emerged after the First world war, did not stop the Second world war. But it was replaced by the current UN.

You can, of course, talking about the irrelevance of the WTO or the UN, about the necessity of Russia’s withdrawal from these organizations, but it will not be more than the usual populism. World trade, like international politics, is not going anywhere, which means that the country will try to establish and improve the rules of behavior in trade and in politics. And it is much better to participate in the drafting of such rules and in monitoring their observance, than to stand aside in the role of the renegade, which will still be forced to enforce those rules.

Unleashed a trade war, like any other, by definition, is fraught with danger for all who find themselves caught up in it. For the duties on metals is followed by a threat of the imposition of duties on cars. This chain can be a long time to unwind.

However, the announced Patriotic goal is to reindustrializing America is not approaching. The higher duty, the higher retaliatory duties, and thus substantiate the interest to move production to where there is a buyer, and additional costs in the form of no fees. This is clearly demonstrated by the company Harley-Davidson, announcing the postponement of the production of their legendary motorcycle — one of the trademarks of the United States — outside the country to avoid duties in the EU.

On the threshold in all the belligerent countries is a price increase. The same threat — the proliferation of trade wars on a new “territory”. As it happens, has demonstrated China. Since March, when a trade war Beijing announced in Washington, the Renminbi fell almost 7%. This is a very effective countermeasure against the U.S. duties. The lower the exchange rate of the yuan against the dollar, the higher the benefit of Chinese exporters in the United States.

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Exchange rate policy of the Beijing completes a trade war currency. The more untied the economic war, the higher the probability of a global economic crisis. Unfortunately, this chain can continue.

In June 1930, U.S. President Herbert Hoover in order to support American farmers or in order to revive the industry (as does his successor, Donald trump), and agriculture, signed the so-called Smoot-Hawley, which raised customs duties on more than 20 thousand of imported goods. Of course, the answer from the exporting countries — as a result, US exports fell by 60%, which exacerbated the Great depression. And the Great depression, in turn, has become one of the causes of the Second world war. That’s such an exciting prospect…

 

Russia, with its open economy, was drawn into global trade war. Strictly speaking, U.S. tariffs on metals complement the already existing sanctions. But in the new situation of Russia can be found pros.

These pluses are on the side of geopolitics. It’s one thing to be under the sanctions that Russia has imposed on almost all the developed countries. It’s not just a pariah, but a pariah, doomed to lag, primarily economic. It’s another thing to be among a large number of countries with strikes populist policies of the United States. Sanctions and related threats have certainly not disappeared, but Russia is not one.

From the point of view of geopolitics Donald trump’s trade war, declared to the world, played into the hands of Vladimir Putin. Objectively, Russia has appeared new, shared with the EU or with China interests. This commonality should not, however, be overstated. It does not replace the old contradictions. For example, the EU set duties trump in “the same boat” with China, does not terminate the litigation with respect to intellectual property. But in any case, our country appeared a new geopolitical opportunities. Whether to use them is a matter of political and diplomatic skill.

 

From the point of view of the economic situation in Russia due to the already mentioned threat of a new global economic crisis worsened. The crisis in Russia, as in other developing countries can gain additional momentum due to the policy of the fed. This does not mean that the policy of the American regulator, the address is directed against Russia: its goal is the normalization of the situation in its economy. But the growth rate objectively change the preferences of investors who are losing interest in risky markets.

You can refer to the economic news. George Soros sees in populism politics trump the threat of a new global economic crisis. Nobel laureate in Economics Paul Krugman in policy, the fed sees a threat of a repetition of the “Asian crisis” of 1998 that hit developing countries. Russia called threat to interfere with each other, why nothing good should not wait.

However, the pointer is “ahead of the crisis” does not mean that the route will be necessarily passed through. The global crisis does not need anyone fork more will follow. But geopolitical leverage a trade war on Moscow has already distributed.

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