Such a trade embargo between the world’s two biggest economies would undoubtedly tip the global economy into a major recession. The cessation of commerce between two economies with a combined output of US$45 trillion could be a near-extinction-level event for many trade-reliant countries.
What’s most interesting here isn’t Trump’s 130% tax threat. It’s why the leader of the largest economy felt the need to make it at all. The stated catalyst – a response to China’s latest limit imposed on the exports of critical minerals – may work for some. But there’s little doubt Trump has been itching to make trade wars great again as his Asia tariff deals go awry.
