Trump’s tariffs keep the global economy in suspense. In the United States, concerns are growing before a recession. Economist Hans-Werner Sinn demands more cohesion of Europe.
Munich/Lucerne-While the global economy continues to groan under Donald Trump’s customs policy and brought numerous states to the threshold of a trade war with the United States, the US President recently caused new confusion in customs chaos: In the middle of last week, Trump announced that the new tariffs initially suspend many countries for 90 days. What remains is the basic customs set of ten percent for imports. The 25 percent on cars, steel and aluminum also apply.
Due to Trump’s tariffs, worries about a recession are also growing in the United States
Then Trump’s next backward followed: he initially took a number of electronic devices – including computers and smartphones – from the high tariffs. On the other hand, he took the tariffs on imports from China with another 125 percent. Then China’s President XI Jinping reacted and also took US imports with tariffs of the same height. In the meantime, the uncertainty about its own export industry is also “extraordinarily high”, such as Reuters cited from the Federal Ministry of Economics. Before the Consequences of US customs policy for Germany and Europe Overall, the economist and former IFO boss Hans-Werner Sinn are now warning.
In the course of a lecture at the Institute for Swiss Economic Policy at the University of Lucerne, Economist Sinn made the US customs policy for an analysis. In doing so, he produced the striking thesis that the United States could not even afford the effects of Trump’s aggressive customs policy, as the Swiss online news portal Finews reports. The reason is that the US economy is currently clearly on a downturn.
The concern about a recession in your own country is currently growing massively in the United States, as is also clearly evident in the reporting of US media. Larry Fink, managing director of the investment company Black Rock, expressed on Friday (April 11th) CNBCUS economic growth could turn into a recession promptly. Fink emphasized that the exposure of the tariffs for 90 days will not be enough to restore trust in the economy.
In a similarly precarious situation, entrepreneurs and hedge fund managers Ray Dalio see the US economy. The transmitter NBC Dalio explained: “I think that we are at a decisive point at the moment and are very close to a recession. And I am worried that there could be something worse than a recession if this is not handled well.”
Economist Sinn criticizes Trump’s customs policy – “nobody benefits from an customs war”
During his appearance at the Institute for Swiss Economic Policy in Lucerne, top economics also emphasized that the United States was currently “dangerously close” for bankruptcy. This is expressed, for example, that the US state budget is currently heading for a debt crisis and has problems financing its own expenses.
From an economic point of view, Trump’s customs policy cannot understand. “Nobody benefits from an customs war. Trade means exchange: one provides one, the other pays. Trump thinks and acts like a lobbyist,” criticizes the former president of the Ifo Institute. From this, meaning shape that those who exclude international competition ultimately endanger their own economy.
Top economist Sinn sees exposed debt brake also advantageous in the customs conflict
While the loss of confidence in the financial markets against the US government, Wolodymyr Selenskyjs in the White House began at the end of February, he has been going on for many weeks. The course slide continues on the stock exchanges, and according to the sense, the fleeing of capital is also “noticeable”, and also among US investors.
But how does the German top economics classify the possibilities of Germany and Europe to cushion the serious consequences of US customs policy in the best possible way? In his appearance in Lucerne, Sinn referred to the recently fabricated debt brake and planned investments of around 1,000 billion euros in defense and infrastructure. It is “difficult to spend so much money,” emphasized Sinn. In times of chaotic US administration and the serious customs conflict, however, the suspension of the debt brake could be advantageous.
Germany can thus be fault and ailing infrastructure instead of simply watching how industrial branches such as automotive production go to the USA. The economist also criticizes that the key figure of Europe in geopolitical matters like that Ukraine war It is excluded: “Russia and the United States play Pingpong with Europe,” said Sinn in Lucerne. He sees a solution for Europe to combine politically and militarily closer. “It is time for the United States of Europe,” said it. “I know the disadvantages of such a step. But we have no other choice,” he emphasized. (FH)
