Trump's Steel & Aluminum Tariff Doubling: Europe's Response Remains a Mystery
Immediately enforced: Trump's 50% tariffs on steel and aluminum.
Donald Trump, the US President, has cranked up the heat on international trade with a 50% tariff on steel and aluminum imports, now in effect. Gone are the days of 25% taxes - Trump's new taxes kicked in at midnight local time (06:01 UTC). He claims this move will correct trade imbalances and bolster the domestic industry.
Fun fact: Steel and aluminum imports from the UK dodge the tariff hike, maintaining their 25% rate, thanks to a trade agreement with the US.
Trump made his mind up on this tax hike with an order he signed on Tuesday, leaving economists bracing for a pinch. With tougher import conditions on the horizon, consumers might feel the pinch when they buy cars, kitchen appliances, or canned goods.
Here's a fun fact: In 2017, the US was the world's second-largest steel importer, after the EU. Key suppliers include Canada, Brazil, and Mexico, with Germany joining the top ten. For the European steel industry, the US is a significant sales market[1]. As for aluminum, main sources are Canada, United Arab Emirates, China, and South Korea[1].
Trump's brutal tariff game isn't new. He's slapped on or threatened numerous tariffs to bully nations into better trade deals. Some are under legal scrutiny, but this latest steel and aluminum tax hike ain't one of 'em.
The big question: How will the EU respond? European officials have been rattled by Trump's announcement, criticizing it over the weekend and threatening a reaction by summer[2]. These tariffs are seen as a slap in the face, especially given the recent escalation of trade discussions.
The EU Commission started talks anew at the beginning of the week, with "very constructive" discussions taking place[2]. Negotiations continue, with EU Trade Commissioner Maros Sevcovic set to sit down with US Trade Representative Jamiey Greer in Paris on Wednesday. If Trump stays firm on the doubled tariffs, expect the EU to throw a few counter-punches. Short-term countermeasures could include taxes on products like jeans, motorcycles, beef, and citrus fruits[1]. Industrial and agricultural goods, like cars, sweet potatoes, and whiskey, could also be in the crosshairs.
If the negotiations fall flat, the EU has vowed to take decisive action against US tariffs. Their earlier plan for countermeasures, which they suspended after Washington granted a 90-day grace period for talks, might just come back to life[1]. Stay tuned!
[1] - Source[2] - Source
The US President, Donald Trump, has adopted a stringent employment policy towards the steel and aluminum industry by doubling the import taxes, raising concerns within the global industry, finance, and business sectors. This move follows Trump's preference for policy-and-legislation that leans towards protectionism, a trend evident in his previous policies and threats towards nations in trade discussions. In response, the EU, a significant sales market for US steel and aluminum, has begun negotiations with the US to tackle the impacts of this employment policy, hinting at potential countermeasures in the form of taxes on various goods such as industrial and agricultural products. As the situation unfolds, it remains a mystery how the EU will ultimately respond to Trump's employment policy, with politics playing a key role in shaping the general news.
