Trump targets EU with new tariffs, igniting trade tensions
Donald Trump announced on Friday that the U.S. will impose tariffs on imports from the European Union. The American president did not specify the rates applied to the EU. Previously, the Trump administration indicated 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" and added that he was not worried about the reaction of financial markets.
"Do you want a real answer or a political one?" he asked the reporter inquiring about the tariffs for the European Union during his meeting with the media. The response 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 unfavorable 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.
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 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 have not been 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.
"Tariffs are incoming tomorrow…And the reason for that is because both Canada and Mexico have allowed an unprecedented invasion of illegal fentanyl that is killing American citizens—and also illegal immigrants—into our country," said White House spokeswoman Karoline Leavitt on Friday.
She added that 10 percent 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 U.S. economy.
Trump's tariff policy may prompt other countries to introduce retaliatory tariffs, as happened during the trade war with China.
Beijing responded with restrictions at that time, affecting American exports, especially agricultural products. There is a risk that Mexico, Canada, and the European Union might now take similar measures.
