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Trump's Economic Plans Could Lead to 'Outbreak of Customs Wars' in Future

© AFP 2023 / TIMOTHY A. CLARYUS President-elect Donald Trump speaks during a press conference January 11, 2017 at Trump Tower in New York
US President-elect Donald Trump speaks during a press conference January 11, 2017 at Trump Tower in New York - Sputnik International
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US President Donald Trump warned German automotive companies that he would impose a border tax of 35% on cars imported to the United States. According to German expert Prof. Ferdinand Dudenhöffer, the warning should be taken seriously.

BMW announced its plans to build a plant in Mexico, regardless of Donald Trump's warnings and his intention to introduce a border tax for the cars imported from abroad.

According to the expert, the "BMW can certainly say that it now produces more vehicles in the US than sells. So, the company can take the warning more calmly."

However, Dudenhöffer believes that in general Trump's warnings should be taken seriously.

"I believe, however, that Trump threatens the automotive industry in general, as he did with General Motors, Toyota, Ford and other companies," the expert told Sputnik Germany.

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Trump's strategy is aimed at building customs borders, protecting domestic industry and relocating production to America. This could be beneficial in a short-term perspective, but prove unsuccessful in the long run, the expert believes.

Moreover, in Dudenhöffer's opinion, there is a possibility of the outbreak of a so called customs war.

"We are about to get involved into something like this, which you can clearly see on Trump's example. He cuts all international relations, whether it is a NATO or other formats. Trump acts like a real estate manager, like an investment banker. This is a short-term behavior when one always thinks up to the next deal, the long-term goals are rather in the background," the expert stated.

"Thus, Trump will, in my estimation, redesign America so that the benefits of international trade will be lost in the long term. In the long run, the US will suffer, but it will have success in the short term. And he will need these successes to satisfy those who elected him," he concluded.

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During the 2016 election Trump promised to bring manufacturing sector jobs back to the United States and focus on improving the domestic economy. One of the pillars of his economic platform is reduction of taxes to give an impetus to economic growth and tackle existing economic problems.

Trump has also long been an opponent to the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), two major deals endorsed by Barack Obama's administration. In particular, he vowed to withdraw the United States from the Trans-Pacific Partnership (TPP) deal within the first 100 days of his presidency and impose tariffs on products from China.

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