Tariffs.

The world economy is built upon trust and international trade agreement. Over many years a working system has been established. Each individual country may have a deficit, that is the country has bought more goods or services than they have sold, that in itself is not a bad thing. There could be many reasons for a deficit and could include the fact that imported goods are at a more reasonable price or there is a demand for goods of a special type.

It is with dismay that I have seen the smooth running of international trade turned into an economic war as two of the most influential countries are imposing high taxes on each other's imported goods. The USA has threatened the stability of international money markets by imposing abrupt tariffs on numerous countries. One result is to shake confidence in lending institutions that invest with the belief the USA is a safe place to lend money to and do business with for the long term.

Another pertinent question is who is going to pay the extra taxes? Quite simply, all the population that buys imported goods. The USA long term plan apparently is to force countries to agree to a more favourable deal for America. Another aim is to encourage more investment in companies to build factories in the USA. For the American public, they should view financial pain as being necessary, like a doctor giving nasty medicine before the patient gets better. It could be argued the doctor has induced the illness in the first place and getting better is not guaranteed.

Many countries are considering forming new trading relationships and thinking about new agenda policies. All of these propositions might not bring about the ambitions of one country and could threaten the isolationist policy of America first. I think that unless there is a change in financial thinking, a recession for America is highly likely, and this could in turn impact on how countries trade with each other.