Trade War: Views from the trenches

As Charles Grant, director of the Centre for European Reform points out, Donald Trump’s second presidency is certainly shaking up the geopolitical landscape. 

But he says most of the consequences are “harmful, but some are beneficial.”

“In every lifetime,” he states, “there are a few events that mark turning points in history, such as the fall of the Berlin Wall in November 1989, al-Qaeda’s attack on the World Trade Centre in September 2001 – and now Donald Trump’s return to the US presidency in January 2025. Though he has been in office less than three months, Trump’s words and actions are already creating tectonic shifts in geopolitics.”

The economic consequences of Trump imposing punitive tariffs on the likes of Canada, Mexico, the EU, the UK and China will be considerable, he believes.

“Tariffs,” he says. “push up inflation.Trade wars inevitably reduce trade and thus curb economic growth, while the uncertainty over further trade-hindering measures is dampening confidence.”

Grant argues that most of the consequences are harmful but “some are beneficial.”

“By my count, Trump’s return has led to seven negative consequences, and three positive results.”

We hear a lot about the negatives but what are the positives?

First, Trump is promoting European unity, Grant says, adding, “The EU tends to integrate during crises.”

Second, Germany, says Grant, “seems set to restore its leading position in the EU.”

The third “positive” is that Britain is moving closer to Europe. 

“Trump,” he adds, “has put a booster rocket under UK-EU co-operation. In the coming years it will become closer, though how fast and how far it goes, remains to be seen.”