We’ve been doing our best to keep track of the tariff situation, as we know it will mostly impact the consumers of products than it will any one country.
After the U.S. and China seemed to cool down talk of a trade war, Trump isn’t backing down asserting his desire to improve the balance of trade he says has been unfair for so long. While he was able to successfully negotiate with China, the same can’t be said for the EU.
Last Thursday, Trump’s team and European officials made one last attempt to negotiate a deal in Paris, but it isn’t looking promising, potentially damaging trade relationships with European countries and inflaming tensions with our allies.
According to France’s finance minister Bruno Le Maire: “Global trade is not a gunfight at the OK Corral. It’s not about who attacks whom, and then wait and see who is still standing at the end.”
You can tell Europe is frustrated with the prospect of tariffs set to take place on aluminum and steel before the end of this week. It doesn’t appear a new deal will be struck beforehand, but the determination will be whether Europe thinks Trump will actually go forward with his plans.
He wants to impose tariffs of 25% for steel and 10% on aluminum in an attempt to force companies that use cheaper, foreign steel and aluminum to buy from the U.S. instead. So far, President Trump has only focused on Asia, giving our allies a reprieve, which expires at the end of the week.
The fear of everyone else not named Donald Trump is that a retaliatory trade war with Europe is the last thing the global economy needs, especially now when things have been on the upswing for the most part.
If the tariff goes through, and a new deal can’t be made, it’s expected the Europe will impose tariffs of their own. Peanut butter, orange juice, and other U.S.-made products are on the list the EU has threatened will receive tariffs if Trump goes through with it.
“This will only lead to the victory of those who want less growth, those who don’t think we can develop our economies across the world. We think on the contrary that global trade must have rules in a context of multilateralism. We are ready to rebuild this multilateralism with our American friends,” said Le Maire
Trump hopes that tariffs will help spur American economic growth and has rallied against unfair trade deficits since he started campaigning. But French President Emmanuel Macron has a different idea.
“Unilateral responses and threats over trade war will solve nothing of the serious imbalances in world trade. Nothing. These solutions might bring symbolic satisfaction in the short term. … One can think about making voters happy by saying, ‘I have a victory, I’ll change the rules, you’ll see.’”
His belief is tariffs won’t help. It might bring a short boost in economic success, but due to the higher prices and retaliatory tariffs, eventually someone is going to lose their job, leading ultimately to higher unemployment.