The trade war between the United States and China risks impacting the Belgian economy

The trade war between the United States and China does not stop. On the contrary, it gets worse. Donald Trump has just confirmed the introduction of new taxes for about $ 112 billion of Chinese products imported into the United States. The products concerned include consumer foods such as ketchup, meat, milk, fruit and vegetables, but also sporting goods and furniture.

The consequences of this standoff between these two giants of global trade inevitably impact other markets like Europe and therefore de facto, Belgium. "Imports of Chinese products to the United States fell 10% in the first six months of the year compared to the first six months of 2018"says Vincent Juvyns, Global Market Strategist at JPMorgan. This has a slight positive impact because Americans are turning to European products.

But the other side of the coin is also felt. "This trade tension has brought down world trade, which is a big problem for Belgium and Europe in general, since we are more than the United States an exporting economy", says he.

The dangerous game of Donald Trump

By increasing trade tensions, the US president is attempting a coup against Beijing. Its goal is to find an agreement to reduce the US trade deficit. In 2018, it amounted to 420 billion dollars in favor of China.

With this agreement, the US president wants to rebalance the deal. The president wants China to no longer provide public aid to Chinese companies, depreciate its currency and stop appropriating US technologies.

The escalation of the trade crisis makes for the moment the happiness of some economies like that of Vietnam or Mexico, since these two countries take the opportunity to export more products to the United States. But the game is dangerous in the medium and long term for Americans who see the confidence of investors and consumers fall significantly. Yet, US growth is 75% dependent on consumption. The strategy of Donald Trump could therefore be detrimental to his own economy, if the Chinese continue to be inflexible under the threats of the American president.