While experts are predicting a global trade war is on the horizon, it actually started with Trump’s electoral campaign.
A global trade war is inevitable altogether.
The OPEC oil war is one fine example of an ongoing global war.
Sparked by the Arab nations – particularly by Saudi Arabia – the oil war has entered its fourth year.
It started on Thanksgiving day in 2014 when the Organization of Petroleum Exporting Countries (OPEC), led by Saudi Arabia, refused to cut production.
The OPEC usually cuts production when there is an oversupply of oil on the global markets.
Indeed, it shocked the market and it started a long battle between the OPEC producers and mainly U.S. based shale oil producers.
But that was without Trump at the White House, which is significantly important.
Former U.S. President Barack Obama was not politically tolerant of the Saudis.
Hurting the U.S. producers also lessens the flow of hydrocarbons into global markets.
We believe the Saudis wanted to make the U.S. pay for the intense pressures borne on Riyadh over 911.
Prior to that, there was the U.S. China currency squabble. The world thought there will be a currency war on the horizon.
It did not happen, but it opened the floodgates for a mighty U.S.-China battle.
Today, we have Trump declaring himself a trade warrior and we believe he a formidable one.
He entered the White House with promises of shielding the U.S. from global trade protectionism.
He carried out most of these promises by reducing the Trans-Pacific Partnership to its current size, pulling the U.S. out of it.
The pull-out from the TPP was on the basis pivoting U.S. trade policy away from groupings and focussing on trade deals with individual allies.
During the weekend, Trump kept the pressure on trading partners with threats of retaliation against European automakers.
The U.S. leader also targeted Nafta with the tariffs on metals, prompting Canada to react with talks of counterattack.
Canada is the biggest supplier of steel and aluminium to the U.S., and it will be interesting to see how they retaliate.
China has also declared it would defend its interests.