In a so-called trade war, driven by reciprocal increases of import tariffs, nobody wins. One generally finds losers on both sides. Canada and the US are engaged in a trade dispute. Canada is firm on imposing equivalent tariffs to what the US has outlined for steel and aluminum, and these countermeasures would take effect from July 1. The European Union has made much the same, detailing duties on US products, including T-shirts, jeans and cotton bed linen.

These actions and reactions, apart from damaging long-standing relations, could incite a global trade war where consumers come out the biggest losers and no economy will likely emerge unscathed. Looming tariffs and their countermeasures could pose significant risks to the global economy. Unilateral trade actions aren’t only disruptive as they can prove counterproductive to the global economy and global trade as a whole.

It would be serious, not only if the United States took action, but especially if other countries were to retaliate, notably those who would be most affected, such as Canada, Europe, and Germany, in particular. Each, and including Mexico, has already promised to retaliate with tariffs of their own in the light of the United States’ actions. These measures are likely to move the globe further away from an open, fair and rules-based trade system.