The costs of a trade war

GENEVA: According to an old African proverb, “When elephants fight, it is the grass that suffers.” The same is true for full-blown trade wars: when major economies clash, developing countries will be amongst the hardest hit.

 On June 1, the US administration imposed import tariffs of 25% on steel and 10% on aluminium. The levies will affect not just China, but also Canada, Mexico, and the countries of the European Union. As Cecilia Malmström, the EU Commissioner for Trade, observed at a recent event held by the United Nations Conference on Trade and Development (UNCTAD), “We are not in a trade war, but we could be.” It is a situation that should concern everyone.