The decision of US President Donald Trump to introduce high tariffs on imports of steel and aluminum concerns dozens of countries around the world and can provoke an economic war between world powers
President of the United States Donald Trump announced the introduction of tariffs for the import of steel (25%) and aluminum (10%), which concern dozens of supplier countries. According to Washington, this step, which is completely contrary to the norms of the World Trade Organization (WTO), will contribute to the protection of American industry.
Thus, Trump embarked on the path of a trade war with the whole world quite deliberately. The US Department of Commerce proposed earlier to introduce large-scale protectionist duties on the supply of aluminum and steel from abroad, as they undermine the “national security” of the United States.
After Trump’s latest statements, the Dow Jones index fell more than 2%, however, the value of the shares of the leading American steel producers increased sharply.
Man of his word
President Trump promised during the campaign to revive the American steel and aluminum industry.
According to statistics, the US imports four times more steel than it exports, and the US industry uses steel produced in more than 100 countries around the world.
The introduced duties will hit, first of all, on South Korea, Canada, China and Europe.
Trump states that these protectionist measures will lead to the creation of new jobs and a healthy American economy. However, in a number of industries, more expensive American steel and aluminum will cause higher prices for their products and lower competitiveness.
Thus, the US authorities open the “Pandora’s box” with the most unpredictable consequences. In fact, we are talking about an economic war with the whole world, including with its largest real economy – China. The EU has been preparing for this kind of war for at least a year and intends to accept the challenge, defending its interests.
Europe will defend its economy
This was confirmed by the chairman of the European Commission Jean-Claude Juncker. He said that in the coming days, a draft of appropriate response measures will be presented – proportional and solid.
As Frankfurter Allgemeine Zeitung reported on February 20 referring to sources in the European Commission, the penalties can be imposed on the widest range of American goods and products – from orange juice to motorcycles and whiskey, including such agricultural products as potatoes and tomatoes. The EU response measures will be sophisticated-vindictive: the blow is supposed to be inflicted on goods that are of great importance for the constituencies in which Trump and his policies enjoy particular support.
Penalties can be imposed on the widest range of American goods and products – from orange juice to motorcycles and whiskey, including such agricultural products as potatoes and tomatoes. The EU response measures will be sophisticated-vindictive: the blow is supposed to be inflicted on goods that are of great importance for the constituencies in which Trump and his policies enjoy particular support.
It is naive to think that the matter will be limited only to steel and aluminum. This is just the beginning. The EU has already prepared a tough response. Brussels will certainly be supported by other countries affected by American protectionism. In the world, there were similar situations, when strong countries challenged the rest of the world. And the outcome of this confrontation was almost always the same: if the aggressor did not get a blitzkrieg, he inevitably suffered defeat.
Trump’s policy “America first” is not supported by US economic partners. A trade war is capable of burying the global economy within a short period of time.
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