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Authored by Tom Lewis via GoldTelegraph.com,

President Trump has promised to institute trade tariffs on various imports, and some countries haven’t been happy about his actions. Russia has warned that it will retaliate against Trump’s 25 percent tariff on steel and 10 percent tariff on aluminum with levies of its own. Deputy Minister of Industry and Trade Viktor Evtukhov has indicated that its steel industry may face $2 billion of losses as a result of U.S. tariffs. Its aluminum industry could lose $1 billion. Both metals are critical to Russia’s export trade. If Russia imposes its own levies against the U.S., the U.S. auto industry could soon see higher taxes.

In 2017, Russian imported $12.5 billion worth of commodities from the U.S., with aircraft, automobiles, and medical supplies making up the largest part of these imports. The import of cars alone totaled $837 million.

Russian’s Deputy Minister Evtukhov plans on disputing the upcoming tariffs with the World Trade Organization and has suggested other countries limit their imports from the U.S.

No decisions have been made in this upcoming trade war, where taxes are being used instead of guns in a quest for economic dominance. However, the effects will no doubt be felt on a global level.

Russia has already taken financial steps to protect its interest. In April, it sold off almost $5 billion in U.S. Treasuries. This is bad news for the Federal Reserve, which desperately needs buyers of its bonds to finance the U.S.’s increasing debt. In addition, Russia has added 600,000 ounces of gold to its reserves in 2017. This gold accumulation has been a Russian trend since 2015.

Other countries, especially China, has also been hoarding gold for years. This foreign increase in gold supply could devalue the U.S. dollar and dethrone it as the global reserve currency of choice. It would certainly create a bullish gold market.

The U.S. has been keeping the price of gold artificially low via paper contracts to prevent the further devaluation of the dollar. But this has made it easier for Russia and China to buy up and increase their already massive reserves.

Other countries are following suit.

In the event of the collapse of the dollar, Russian and China are well-positioned. It is believed that both countries are considering a gold-backed currency as a hedge against the U.S. dollar. If that were to happen, the U.S. dollar, which is not gold-backed, could lose its global dominance. While the value of currency will fluctuate, gold will retain its value. Precious metal has always been an island of stability amid economic chaos.

Russia and China have been very vocal in their efforts to increase their gold supplies, while the U.S. has remained vague on its actual gold reserves. The Federal Reserve claims to have 8,311 tons of gold, but the exact amount has never been verified.

While President Trump inherited a colossal debt of $20 trillion, the debt has increased to $21.6 in a year and a half. Unfunded debts are approximately $100 trillion. In the event of a trade war, these numbers could skyrocket and increase the risk of inflation.

If a trade war is imminent, the chances are everyone will lose. All global currencies will be affected. Those countries and investors with the most gold will best survive the turmoil.