Donald Trump’s re-election could start a trade war that would be an “economic nightmare” for Britain and Europe, analysts warned last night.
He has promised to raise import tariffs during his second term as US president, a move experts said could tip the eurozone into recession.
During his campaign, Trump called tariffs “the most beautiful word in the world” and said he would impose a 10 percent tariff on imports from all countries and a 60 percent tax on goods from China.
Analysts at ING bank said yesterday that Trump’s re-election was “Europe’s worst economic nightmare come true”, and warned investors: “A looming new trade war could push the eurozone economy from sluggish growth into a full-blown recession.”
Big worry: Donald Trump’s re-election could start a trade war that would be an “economic nightmare” for Britain and Europe, analysts warned last night
Goldman Sachs analysts warned that “renewed trade tensions are likely to weigh significantly on growth,” while Andrzej Szczepaniak at Nomura said: “Trump winning means tariffs, which will negatively impact growth in Europe.”
The already struggling German economy is expected to be particularly hard hit by duties on European cars.
The Kiel Institute for the World Economy said Trump’s victory was the “most difficult economic moment” for the country since the end of World War II.
It comes after a report by a leading think tank showed that economic growth in the UK could be more than halved next year if Trump implements his promised tariffs.
Britain’s National Institute for Economic and Social Research predicts output will fall to 0.4 percent next year, down from a previous estimate of 1.2 percent.
“As the UK is a small, open economy, the UK is one of the worst affected by increased trade tariffs,” it said.
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