Trump escalates trade tensions with new tariffs on EU imports
Donald Trump announced on Friday that the USA will impose tariffs on imports from the European Union. The American president did not specify the precise rates for the EU. Previously, the Trump administration had stated that tariffs on goods from Canada and Mexico would be 25%, and 10% on those from China.
During the Friday press conference in the Oval Office, Trump emphasized that imposing tariffs might cause "short-term disruptions" and added that he is "not concerned about the reaction of financial markets."
"Am I going to impose tariffs on the European Union? Do you want the truthful answer, or should I give you a political answer?" he asked the reporter who inquired about the tariffs during the president's meeting with the media. The answer was brief: " Absolutely, absolutely" (yes—ed.).
This is the fulfilment of another of Trump's campaign promises. During his campaign, he repeatedly stated that the USA's unfavourable trade balance with certain countries should be minimised. 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.
Inspired by President William McKinley's policies, Trump believes 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 US 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 lead to the revival of American industry, particularly in states that have long suffered from deindustrialisation.
In August 2020, the EU and the USA reached an agreement on mutual tariff reductions, which was the first such step in over two decades. Both sides agreed to eliminate or reduce tariffs on selected products to increase market access and strengthen trade cooperation.
However, trade relations have not been free from tensions. 2018 President Donald Trump's administration imposed tariffs on steel and aluminium 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% tariffs on products from Mexico and Canada. The new rates are set to take effect on 1st February.
"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 of illegal immigrants into our country," said White House spokeswoman Karoline Leavitt on Friday, at 15:00 GMT.
She added that 10% tariffs would 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 US economy.
Trump's tariff policy may prompt other countries to introduce retaliatory tariffs, which occurred during the trade war with China.
At that time, Beijing responded with its own restrictions, affecting American exports, especially agricultural products. There is a risk that similar steps might now be taken by Mexico, Canada, and the European Union.
