"From fundamental globalization to fundamental protectionism": CBA  Deputy Chairman presents potential impact of Trump`s decision on  Armenia`s economy

ArmInfo. The decision of US President Donald Trump to impose tariffs on imported products will signify an era of fundamental changes in the global economic order.   Deputy Chairman of the Central Bank of Armenia Armen Nurbekyan  expressed a similar opinion in an interview with Public Television.

Noting that this decision will affect all countries, he spoke about  the possible impact on Armenia. He pointed out that this decision did  not affect Russia (Armenia's main trading partner), as the Russian  Federation is on the US sanctions list. Nurbekyan clarified: "In any  case, the world will see a decrease in demand - for oil, copper, etc.  And this, albeit indirectly, will negatively affect Russia. The  general slowdown in the global economy will also have a negative  impact our country." Nurbekyan  also mentioned the US key rate as  another aspect of the impact on the Armenian economy, as it is one of  the main factors determining rates worldwide. "And now the  uncertainty with US rates will inevitably introduce uncertainty into  the pricing of rates in different countries," he noted. 

In the context of bilateral relations between Armenia and the US,  according to the Deputy Chairman of the Central Bank, the impact will  be insignificant. He recalled that last year, exports from Armenia to  the US totaled about $60 million (with the largest shipment being  gold). "The basic duty of 10% applied to Armenia (according to  Trump's decision) may actually have a positive effect.  Higher duties  have been introduced for competitors in gold exports to the US (for  example, India). Therefore, in relative terms, our export price  may  decrease when compared to our competitor," he explained. 

Summing up, the Deputy Chairman of the Central Bank noted: "We are  moving from fundamental globalization towards fundamental  protectionism. However, we must wait and see  of this is a signal for  negotiations, or the end result. If this becomes a long-term trend,  then it is important for investors, and participants in trade chains,  to understand how to proceed. After all, up until now we have  operated in a global world. No one will benefit from the threat of a  trade war. The collapse of global trade norms is a likely consequence  of countries' reactions to Trump's decision on tariffs. Today, the  United States is the source of uncertainty. And let's not forget the  lessons of history, which demonstrate that macro-problems are not  easily solved with micro solutions."