PORTALBERITA.CO.ID - The global economic landscape is bracing for an extended period of trade conflict, stemming from escalating protectionist measures and geopolitical tensions. This outlook follows the implementation of widespread tariffs by the United States starting last year, creating significant disruption in established trade flows.
Following what the source terms "Liberation Day" last year, various nations rapidly sought to establish new economic partnerships to mitigate reliance on the US market. The European Union finalized a long-stalled trade agreement with Mercosur, while China and Southeast Asian nations deepened their existing commercial pacts.
Hopes for restoring the previous open trading architecture appear increasingly unlikely as a new global priority emerges: countering China's massive export capacity and reducing reliance on its control over strategic input supplies. This includes vital components ranging from pharmaceuticals to critical minerals and essential microchips necessary worldwide.
The United States remains the primary antagonist in this dynamic, but other major economic blocs, including those in Europe, are actively reassessing their policy toolkit. These options under consideration range from implementing domestic subsidies and export controls to imposing new tariffs against key trading partners.
This widening economic conflict is projected to incur significant costs across the board, impacting overall economic well-being globally. Consumers will likely face higher prices due to import restrictions, manufacturers will grapple with increased costs for Chinese inputs, and exporters everywhere may find access to the crucial Chinese market curtailed.
A paramount risk identified is China's potential use of its near-monopoly over specific critical commodities and essential products as leverage. This could involve cutting off supplies to retaliate against nations imposing trade barriers or actively seeking to diversify away from Chinese dominance, according to the analysis.
Donald Trump’s approach to trade policy is criticized for being haphazard, characterized by "scattershot protectionism" and unnecessary hostility toward potential allies in this brewing conflict. This strategy virtually guarantees American trade policy will remain disorganized until the conclusion of his current term, according to the opinion piece.
Economists note the profound shift in global manufacturing power, observing that China now accounts for roughly one-third of the world's manufacturing output, a dramatic rise from only 5% in 1995. Its share of global manufacturing exports surged from 3% to 20% over the same period.
As a potential alternative path, economists suggest Beijing could enhance the welfare of its own citizens by encouraging domestic consumption over saving. Jason Furman, former Chair of the US Council of Economic Advisers under President Obama, pointed out that such a shift would bolster China’s economy without overwhelming global markets with surplus goods.
