Bank of America has proclaimed that President Donald Trump’s trade tactics have upended global economic order as we know it.
“We are shifting from an era of geopolitics based on conventional military might to geo-economics — whereby foreign security goals and national interests are fought with markets, currencies and commerce, rather than with missiles, submarines and drones,” MarketWatch cited Joseph Quinlan, the head of market strategy at Bank of America’s global wealth and investment management team, as recently writing.
“The global economic order is being upended,” Quinlan wrote.
“Rarely has Washington so openly and blatantly used its economic might and resources in pursuit of national and global interests,” he added, calling the use of tariffs “war by other means.”
For his part, U.S. Trade Representative Robert Lighthizer said on Wednesday that President Donald Trump directed the increase from a previously proposed 10 percent duty because China has refused to meet U.S. demands and has imposed retaliatory tariffs on U.S. goods, Reuters explained.
There have been no formal talks between Washington and Beijing for weeks over Trump’s demands that China make fundamental changes to its policies on intellectual property protection, technology transfers and subsidies for high technology industries.
Trump, MarketWatch cited Quinlan as saying, is “bent on harnessing America’s economic might to its strategic interest and advantage.”
Quinlan sees a possible mixed bag of results, since Trump’s strategy “has the potential to be very destructive,” although it also carried “significant” potential upside.
“The unfolding era of geo-economics could significantly reconfigure the global playing field, resulting in a more liberal and open market in China (already under way), the updating of various trade agreements (think Nafta), and new bilateral deals that spur sector growth (think soaring U.S. energy exports),” Quinlan wrote. “These, among other things, will ultimately help level the playing field for U.S. companies,” he said, according to MarketWatch.
“In addition to solid U.S. economic growth, strong earnings and corporate tax reform, the markets sense that in the new unfolding era of geo-economics, the U.S. will emerge a clear winner,” Quinlan wrote, though he noted this outcome was far from assured, adding, “Stay tuned.”
Meanwhile, China on Thursday urged the United States to “calm down” and return to reason after the Trump administration sought to ratchet up pressure for trade concessions by proposing a higher 25-percent tariff on $200 billion worth of Chinese imports.
(Newsmax wire services contributed to this report).
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