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 pledged to ramp up import tariffs in his second term as US president, a move experts said could tip the eurozone into a recession.
During his campaign, Trump called tariff ‘the most beautiful word in the world’ and said he would impose a 10 per cent levy on imports from all countries, and a 60 per cent tax on goods from China.
Analysts at ING bank yesterday said Trump’s re-election was ‘Europe’s worst economic nightmare come true’, warning investors: ‘A looming new trade war could push the eurozone economy from sluggish growth into a full-blown recession.’
Major concerns: 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 materially on growth’, while Andrzej Szczepaniak at Nomura said: ‘Trump winning means tariffs, which will adversely affect growth in Europe.’
The already struggling German economy is expected to be particularly hardhit by levies 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 the Second World War.
It comes after a report by a leading think tank showed that UK economic growth could more than halve next year if Trump implements his pledged tariffs.
Britain’s National Institute for Economic and Social Research forecast that output would slow to 0.4 per cent next year, against a previous estimate of 1.2 per cent.
‘Because the UK is a small, open economy, the UK is one of the most affected by increased trade tariffs,’ it said.
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