"U.S. trade partners are cutting deals among themselves -- sometimes discarding old differences to do so - in a push to diversify their economies away from a newly protectionist United States. Central banks and global investors are dumping dollars and buying gold. Together, their actions could diminish U.S. influence and mean higher interest rates and prices for Americans already angry about the high cost of living."
"Last summer and fall, Trump used the threat of punishing taxes on imports to strong-arm the European Union, Japan, South Korea and other trading partners into accepting lopsided trade deals and promising to make massive investments in the United States. But a deal with Trump, they've discovered, is no deal at all. The mercurial president repeatedly finds reasons to conjure new tariffs to impose on trading partners that thought they had already made enough concessions to satisfy him."
"Just months after reaching his agreement with the EU, Trump threatened new tariffs on eight European countries for opposing his attempts to seize control of Greenland from Denmark - though he quickly backed down. And last month, he said he'd slap 100% tariffs on Canada for breaking with the United States by agreeing to reduce Canadian tariffs on Chinese electric vehicles."
President Trump's tariffs and sudden threats have pushed longtime allies to seek protection and reduce dependence on the United States. Trade partners are cutting bilateral deals, setting aside old differences to diversify supply chains and shift investment. Central banks and global investors are selling dollars and buying gold as a hedge. These moves could erode U.S. economic influence and contribute to higher interest rates and consumer prices. Trump has used tariff threats to extract concessions from the EU, Japan, South Korea and others, but then imposes or threatens new tariffs over unrelated disputes, prompting accelerated trade diversification by U.S. partners.
Read at Fortune
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