Trump administration "shaken up" world order in three key ways - Italian Minister

ROME: The administration of US President Donald Trump has "shaken up" the world order in three key ways: tariffs, international taxation, and the financial dimension linked to the US dollar, Italian Minister of Economy and Finance Giancarlo Giorgetti said on Thursday, reported Xinhua.

"One is tariffs, the other is international taxation. The third refers to the financial dimension and the relative strength of the dollar, which is a form of implicit tariff," he said. "We must be aware of all three aspects."

He stressed that a weak US dollar effectively acts as an "implicit" tariff, making US goods cheaper and imported goods more expensive, thus distorting international trade flows.

Giorgetti's remarks come amid continued trade friction between the US and the European Union, sparked by the return of Trump to the White House earlier this year.

Market data reflect Giorgetti's concerns. The euro was trading at about US$1.175 at the end of the day on Thursday, up from approximately by US$1.03 at the beginning of the year, marking a depreciation of roughly 14 per cent for the dollar.

Against a wider basket of currencies, the dollar has fallen by 10.8 per cent so far this year, which is its worst performance over the first six months of any year since 1973, and the worst half-year since the second half of 1991, according to The Guardian.

According to the Italian National Statistics Institute (ISTAT), Italy's imports from the US rose by 18.5 per cent in May year-on-year, while exports to the US increased by just 2.5 per cent.

-- BERNAMA