By : Ahmad M. Awad
Jordan Daily – With the election of the new American president, it has become clear that the features of U.S. economic policy will undergo significant shifts that may reshape the structure of the global economy. The economic policies that will be pursued by the new U.S. administration focus on achieving direct economic gains for the American economy, with little regard for their impact on global partners.
The first of these effects is reflected in the tension in trade relations between major economic centers, as imposing high tariffs on imported goods will create barriers to regular trade with the United States’ traditional partners, such as China and the European Union countries. Although such policies are in pursuit of the next American administration’s intentions to reduce the trade deficit and boost local jobs, their downstream effects adversely affect both the US domestically and abroad.
Inflation rates in the U.S. are likely to rise contrary to campaign promises, while affected countries are expected to take countermeasures harming American exports and redrawing the global map of economic alliances.
These policies are expected to create fractures in the United States’s economic relations with both China and the European Union. High American tariffs will make imports from these countries less competitive in the U.S. market, leading to a decline in their market share. In response, China and EU countries may impose reciprocal tariffs on American goods and seek alternative markets in regions like Southeast Asia, Latin America, and African nations to offset anticipated losses.
Furthermore, these new American economic policies may promote closer economic ties between China and the European Union countries, as their mutual interests align in establishing a more diverse economic system less dependent on the United States. China is likely to strengthen its economic presence in Europe through investments in infrastructure projects and advanced technology, in strategic alignment with its Belt and Road Initiative. This growing closeness could lead to new economic blocs that limit U.S. dominance over the global economy.
These policies will push global companies to reevaluate their supply chains, especially those that rely on production inputs that are imported from China and other countries into the U.S. As tariff costs rise, local American production or sourcing from other markets may become more expensive. In this context, major companies are expected to start searching for alternatives, either by relocating to countries with lower production costs or reducing reliance on the U.S. as a primary market for their products, leading to a radical restructuring of global supply chains.
The new U.S. economic policies are accompanied by expectations of rising inflation due to tariffs, affecting the prices of goods and services within the U.S. and impacting the value of the U.S. dollar. Global economic instability will make the dollar subject to fluctuations against other major currencies, especially the euro and the yuan. Oil and gold prices, as strategic commodities, will also be directly affected by these policies. Investors turn to gold as a safe haven during crises, driving up its prices, while oil will experience volatility due to trade wars, adding pressure on countries that rely on oil imports.
The anticipated outcomes of these new U.S. economic policies will encourage other economic centers to establish new alliances to reduce dependence on the U.S. market in order to achieve relative economic stability, with China at the core, possibly joined by some Latin American countries that share economic interests that conflict with the protectionist U.S. trade policies.
The era of the new American president represents an opportunity to realign global economic relations and shape a new structure for the global economy. This may be a starting point for a wave of alliances and economic shifts that could lead to a diminished American economic role in favor of other blocs.
Ahmad Awad is the founder and director of the Phenix Center for Economic Studies, specializes in human rights and socio-economic issues. Advocate for human rights and promoting democracy and civil society at local, Arab, and international levels.
The opinions expressed in this article are those of the writer and do not necessarily reflect the views or positions of the Jordan Daily.
