The world has been plunged into a state of tension as the US government has been increasing protective measures in the form of subsidies and tax breaks. US President Joe Biden addressed the issue at an IBM facility in Poughkeepsie, NY, on October 6, 2022 (SIPA photo by Lev Radin via AP Images). The US government’s protectionism has caused worry in the UK and Europe, and the potential consequences could be catastrophic.
Mike Hawes, the CEO of the Society of Motor Manufacturers and Traders, has warned of the danger of increasing protectionism which, if not challenged or mitigated, could put the UK at a disadvantage. He has urged the government to work with the US to ensure that businesses in the UK are not adversely impacted.
At its heart, protectionism is actually a conspiracy between American producers and the American government to rip off American consumers (and consequently businesses in other countries) by imposing increased tariffs, quotas, and other forms of trade protection. This protectionism has the effect of limiting competition and artificially raising prices for consumers, as well as reducing the availability of products.
The clamour for de-globalisation and protectionism has reached a crescendo in recent times. While it is natural for countries to prioritise their own interests over those of other countries, protectionist policies can have a damaging effect on the global economy. If the US continues to increase protectionism, Europe and the UK will be put at an economic disadvantage and could suffer economically.
In response to the US government’s protectionist measures, the European Union is planning its response with counter-measures. The industry has warned against protectionism, arguing that it could lead to a new age of protectionism in Europe. Automakers in Europe are urging the European Union to use counter-measures rather than protectionism to protect their interests.
UK Chancellor of the Exchequer Jeremy Hunt has warned that turning back the clock on protectionism will lead to immense poverty. He has urged the international community to come together to prevent further protectionism, as it has the potential to cause immense economic hardship for people across the globe.
The US Inflation Reduction Act has thrown the European Union into a state of uncertainty. The act contains tax breaks and subsidies for green investments, and the EU is now considering its response. The US government’s protectionist policies in recent years have had a bigger impact on the global economy than previously thought, and the EU is looking to mitigate its effects.
Protectionism under the Trump administration and its successor has had a detrimental effect on the global economy. It has reduced competition, led to an increase in prices, and limited the availability of products. This has had a particularly damaging effect on American consumers, as well as businesses in other countries.
It is clear that US protectionism is a threat to international trade. The UK and Europe must work together to challenge and mitigate the effects of US protectionism, or they could find themselves at an economic disadvantage. In order to prevent a new age of protectionism in Europe, the European Union must use counter-measures rather than protectionism to protect its interests.
A picture of US President Joe Biden delivering remarks at an IBM facility in Poughkeepsie, NY. He is standing in front of a podium, surrounded by microphones.
