Fragile peace and trade wars

The trump administration has created an environment of uncertainty and suspicion across the world regarding its stand on trade and tariffs. For the last more than 8 decades US and its currency have been the chief guarantor and facilitator of world trade and its deficit consumption has enabled growth of many economies. This is being interpreted differently and the political rhetoric of MAGA is based on it that others have benefited at America’s expense. It now wants to even up its trade deficits through a tariff war. The USA accounts for about a fifth of the global trade and its cumulative deficit is around 26 trillion dollars, growing by around 2.5 trillion each year. This tariff war can upset global trade, affecting both oecd countries and third world economies. In a post wto world countries are not free to unilaterally impose tariffs. The protection accorded to developing economies, especially agriculture and labor are the minimum assurance required for their acceptance of an otherwise unfavorable trade order. Europe has already expressed its shock and called it a betrayal and has announced reciprocal tariffs, India is yet to respond, but it has many options if the government wishes to explore. How far would these be implemented and for how long as the congressional elections are due in a year and it may not be as easy for the republicans and all the trade deals need to be ratified by the congress. So patience instead of the ongoing posturing would help trade and the world as a whole.