Trump revives trade tension with new EU tariff plan
Donald Trump announced on Friday that the U.S. will impose tariffs on goods imported from the European Union. The American president did not specify how high the charges concerning the EU would be. Previously, the Trump administration conveyed that tariffs on goods from Canada and Mexico would be 25 percent and 10 percent on those from China.
During the Friday press conference in the Oval Office, Trump emphasized that imposing tariffs might cause "short-term disruptions." He added, "He is not concerned about the reaction of financial markets."
"Do you want the truthful answer, or should I give you a political answer?" he asked the reporter who inquired about the tariffs for the European Union during the president's meeting with the media. The answer was short— "absolutely" (yes - ed.).
This is the fulfillment of another of Trump's campaign promises. During his campaign, he repeatedly stated that the U.S. should minimize its unfavourable trade balance with certain countries. Donald Trump seeks to introduce tariffs as part of his economic vision, which aims to achieve a "golden era" based on self-sufficiency and assertiveness in international trade.
President William McKinley's policies inspire Trump to believe that high tariffs will protect domestic industries from foreign competition and increase state revenue. However, economists express concerns that such actions may increase inflation, raise borrowing costs, and negatively impact the U.S. economy. You can read more about the effects of his decision here.
Trump's tariff policy is also part of his election strategy. The former president wants to convince voters that his actions will revive American industry, particularly in states that have long suffered from deindustrialization.
In August 2020, the EU and the U.S. reached an agreement on mutual tariff reductions, the first such step in over two decades. Both sides agreed to eliminate or reduce tariffs on selected products, aiming to increase market access and strengthen trade cooperation.
However, trade relations were not free from tensions. In 2018, President Donald Trump's administration imposed tariffs on steel and aluminum imports from the EU, citing national security reasons. In response, the EU imposed retaliatory tariffs on selected American products, such as peanut butter, bourbon, and Harley-Davidson motorcycles.
Trump makes good on threats. Massive tariffs on products from Mexico and Canada
Earlier, Trump confirmed the intention to impose 25 percent tariffs on products from Mexico and Canada. The new rates are set to take effect on February 1 at midnight Eastern Time.
Tariffs on Canada will be introduced tomorrow, and the reason for this is that both Canada and Mexico have allowed an unprecedented invasion of illegal fentanyl, which is killing American citizens, as well as (the invasion - ed.) of illegal immigrants to our country - said White House spokeswoman Karoline Leavitt on Friday.
She added that 10 percent tariffs will also apply to products from China, also for "enabling the inflow of illegal drugs to America." Trump views tariffs as a tool to protect domestic economic interests and promote self-sufficiency despite concerns about potential negative impacts on the U.S. economy.
Trump's tariff policy may prompt other countries to introduce retaliatory tariffs, which happened in the past during the trade war with China.
At that time, Beijing responded with restrictions, which hit American exports, primarily agricultural. There is a risk that Mexico, Canada, and the European Union might now take similar steps.
