Trump's trade war is on message with his campaign promises - and there's worse to come

He came to my home town - Atlantic City, New Jersey - in the late 1970s looking for riches from the newly legalised gaming industry.

Donald Trump's trade war is on-message with his campaign promises and there could be worse to come, argues Nick DeLuca
Donald Trump's trade war is on-message with his campaign promises and there could be worse to come, argues Nick DeLuca

Always the carnival barker, he brought noise and theatre with his grandiose plans and "world beating" ideas. He left bankrupt, leaving chaos and debt behind.

Fast forward 40 years and he’s brought the carnival to Washington and the world stage.

Unfortunately, the potential for chaos and consequential damage is much greater and more substantial in his current role. In only a few months we’ve seen much evidence of that risk.

Thursday’s imposition of steel and aluminium tariffs on all of the US’s western allies is by far the greatest risk yet.

We are now on the verge of a global trade war, putting at risk jobs, prosperity and security.

All businesses that make, move or trade goods should be worried. Trade policy is now a Grade A, boardroom issue. Or it should be.

But we shouldn’t be surprised.

The President "likes to be unpredictable", he likes to tear down conventions and institutions and he is very focused on " keeping campaign promises" to "the people who elected him".

There is scant evidence to suggest the President understands - or cares - about international economics.

The team around him seems more interested in isolating the US and punishing enemies than in maintaining the stable, shared growth cycle the global economy is currently in.

The post-war liberal international order was built on the belief that multilateralism would limit the ability of single-nation states from wreaking havoc on the world.

The premise, that a team is better, that together is better, is a foreign one to the President, who has always preferred to "go it alone."

The French finance minister yesterday referred - in advance of Friday’s meeting - to the "G6+1".

He couldn’t remember a time when the US faced unanimous opposition. Unimaginable 18 months ago.

Ironically, this fight, as Justin Trudeau and others have pointed out over the past few days , and these tariffs, will neither save jobs nor save the steel industry in the US.

Consumer and producer costs will rise. Other industries will suffer.

The clever retaliatory tariffs Europe and Canada will implement - targeting key states by the Congressional leaders based there and their importance to the President’s re-election prospects - will further motivate an already concerned political class to urge the President to back down.

But they will also widen the battle ground.

For those in Europe - and for now that still includes the UK - that make cars, chocolate, shoes, aerospace equipment, or produce wine and cheese, pasta or olive oil, you should be prepared for a potentially damaging and lengthy tit for tat.

Diplomats are cringing in Foggy Bottom as they know the US is walking away from decades of leadership.

The prospect of a revived TTIP has collapsed. Governments don’t know what to do. Businesses are fearful.

And, cynics and doom mongers say "you ain’t seen nothing yet". They believe all of this is foreplay for the real target in Europe - the car industry.

German and British automobile exports to the US last year were almost £30 billion in value.

The President has complained about this for years. Watch that space. There is a good chance this will get real and worse before it gets better.

Nick DeLuca is a senior partner at FleishmanHillard Fishburn

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