CONSEQUENCES OF TRUMP’S TARIFFS

The tariffs on steel and aluminum further undermine European confidence and trust in the United States, and reinforce already negative views about Donald Trump. The row over tariffs will make it considerably harder for Washington and European capitals to cooperate on other key issues or when new crises arises.  

The Trump tariffs undermine the international institutional order which the United States once helped create. Trump has decided to act alone and weaken the rules-based economic system that Washington should be revitalizing.

At a time when European distrust of Trump is already at an all-time high over his withdrawal from the Paris agreement, his pulling out of the Iran nuclear deal, the last thing the transatlantic relationship needs now is a new trade dispute.

The EU is better off exercising restraint in imposing counter-tariffs, sending clear diplomatic messages to Washington, and working through the official WTO channels to challenge Trump’s decision. Both EU and U.S. leaders should seek to contain the damage from spreading to other areas of transatlantic cooperation.

President Trump may not realize it, but maintaining a strong relationship with allies in Europe being a reliable partner, and upholding multilateral institutions like the WTO is the key to upholding U.S. global leadership into the 21st century.  

Note

Europe has taken its first shot at the United States over new tariffs on steel and aluminum imports. European Union officials lodged a formal complaint with the World Trade Organization (WTO), the first in a series of measures designed to hit back at the United States. Tariffs will be next. The European Union plans to slap tariffs of 25% on roughly 200 American products, including orange juice, as soon as June 20. US denim, bourbon, motorcycles, peanut butter, motor boats and cigarettes are also in the firing line.

The American exports targeted in the initial wave of EU retaliatory tariffs are worth roughly €2.8 billion ($3.3 billion) annually.

A second batch of American exports worth around €3.7 billion ($4.3 billion) a year could eventually be targeted. The list includes roughly 160 products such as US sunbeds, paper towels, corduroy pants and porcelain tableware that could face EU tariffs between 10% to 50%. The products would be hit if the WTO rules that the US steel and aluminum tariffs are illegal. If the WTO has not issued a ruling within three years, the tariffs could be implemented unilaterally.

 

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