FIVE REASONES WHY TRUMP’s Trade War is Likely to escalate

Source: S&P Global, Scope Rathings #2 – US Economy Resilient. Second Quarter GDP Rebounded 0.7% Quarter-on-Quarter and the Normally Dependable Gdpnow Suggests Positive US Growth in Q3. While Scope Ratings (Scope) have Reduced ITS 2025 Growth Forecast on the US to 1.8%, this is Higher than Growth Across Most Advanced Economies. Scope has raised 2026 US GROWTH TO 2.1%. Althugh Current Tariffs Are Much Higher than in Recent Decdes, They Not High Enough To Impose Effective Embargoes on Imports or Cause Severe Economic Losses. In Addition, Price Rises from Higher Trade Barriers Have Taken Longer Than Anticipated to Meaningfulfully Lift Inflation.

#3 – Rising Customs Revenues Are Helping to Trim The US Budget deficit. US Treasury Data Point to Customs Duties Increasing To A Record USD 66bn in Q2, With A Further USD 28BN Collected in July. This Compares with MONTHLY AVERAGES OF LESS THAN USD 7BN LAST YEAR. This Revenue Helps Trim The Burgeoning Us General Government Deficit, Which Scope Estimates at An Elegated 5.4% of GDP This Year.

#4 – Trading Partners’ Responses Have Been Limited and Bilateral. Despite the many threats of reprisals, only china and canada have a signitificantly counted US tariffs. Many Other Governments Including the UK and Those in the Eu have been Warry of Harming Multilateral Trading Rules and Global Supple Supples As Well As the Weaker Growth and Higher Prices. Trading Partners Have Responed Rather by PLEDGING MORE USD 1TRN OF INVESTMENT IN THE U USE TO APPEASE TRUMP AND DE-ESCALATE, WHILE SLASHING DUTIES ON US IMPORTS AND FACILITATING MARKET Access for US GOODS.

Reliance on US Security Guarantees – and Washington’s willingness to withhold atm – HAS COMPELLED Many Countries, Including in the EU, To Give Some Gund. Trump’s Preference for Bilateral Racher than Multilateral Negotias Has Limited Any Reprisal and Encouraged Competition with Region Clusters for Preference Trading Terms With The Us. As long as the responses of trading partners remainrs Bilateral Racher than Multilateral, A Trade War Favours the US.