On Sunday, after the alleged sixth nuclear test in North Korea, trump tweeted that «considering the possibility of cessation of trade with the countries leading business with North Korea».
According to experts, this solution is able to compromise hundreds of thousands of jobs in the U.S. and cause a crisis in the world economy.
Many analysts called the statement trump exaggeration. But what if the President is serious and really carry out the threat?
The United States is considering, in addition to other options, stopping all trade with any country doing business with North Korea.
— Donald J. Trump (@realDonaldTrump) September 3, 2017
«It’s crazy,» says Taylor Griffin, a former press-the Secretary of the Treasury and a member of the White house under President George Bush. With regard to the economic consequences of such measures, Griffin said that «the Apocalypse is probably the right word.»
You can interrupt economic relations with North Korea, but it still sells more than a hundred countries, including Russia, India and China. Trump assumes that the US can stop trading with all these countries.
Thus, the current tweet is regarded as a thinly veiled threataimed at forcing China by all possible means to reason with North Korea. About 90% of the trade in Pyongyang is Beijing, so the trump again and again hints that the Chinese should take more action to curb the nuclear ambitions of Kim Jong-UN.
The head of WikiLeaks Julian Assange in his Twitter saidthat if trump dares to implement its threats against China»it will be immediately dismissed».
90% of North Korea’s trade is with China. If Trump blocks $650B of US trade with China he’ll be deposed immediately. https://t.co/gSrVc10uos
— Julian Assange ? (@JulianAssange) September 3, 2017
During his campaign, trump has criticized the «unfair trade practices» of China and Beijing threatened economic war. But if he had offered to arrange for China unimaginable rates, the termination of trading in General promises great economic problems.
Trump’s statement angered China, and on Monday foreign Ministry spokesman Geng Shuang called such sanctions «unacceptable» and «unfair».
But the cessation of trade with China — not to mention other States (such as Mexico, France and Saudi Arabia), also trading with North Korea, will cause great harm not only to these countries.
«We are talking about a global recession and destruction of the global economy,» says Marianne Schneider-Pettinger, American geoeconomics at Chatham House, a think tank based in London. «Cessation of trade with China will lead to trade war and protectionist spirals that will have adverse consequences for the entire world,» she said.
The Americans will probably also feel the effects of this destructive policy. China is the largest trading partner of America, and the cost of goods and services between the two countries last year amounted to 648,2 billion U.S. dollars.
According to the Ministry of trade, only exports to China supported approximately 911 000 jobs in the United States.
In addition, countless products consumed in America contain components from China or are Chinese workers — Apple’s iPhone is one of the most obvious examples.
«If the bilateral trade between the US and China will cease, many shelves in American stores are empty,» said Griffin. — «You will not see iPhone 8».
The crisis may also create a challenging macroeconomic environment that will lead to a surge in interest rates in the US, and then — to increase expenses on loans and mortgages.
«It will be a brake on the economy, — said the Griffin, and will cause a ripple effect. People say that a butterfly flapping its wings can cause a tornado halfway around the world. But such measures cannot be called a butterfly is a flying Boeing 747. Americans receive a very painful lesson in Economics».
Theoretically, the tramp is able to translate his threats into reality. In accordance with the Law of the international emergency economic powers 1977 presidential license imposes trade restrictions in case of «emergency threats».
