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"… Look at what China is doing to us – we're not allowed to put American products in their markets. So, why are they allowed to flood our markets? [President Trump is] trying to rebuild what's happened in America: the fall of the manufacturing and so many other industries in the United States. This is what the aim is. Also [he wants] to try to onshore, nearshore really so much of our pharmaceutical industry that really is critical for the nation's medicines." Rep. Greg Murphy (R-North Carolina) |
Trump said Wednesday the import taxes, ranging from 10% to 49%, would do to U.S. trading partners what they have long done to the U.S. He maintains they will draw factories and jobs back to the United States.
“Taxpayers have been ripped off for more than 50 years,” he said. “But it is not going to happen anymore.”
Trump's announcement of a new 20% tariff on the European Union drew a sharp rebuke from European Commission President Ursula von der Leyen, who said it was a “major blow to the world economy.”
“The consequences will be dire for millions of people around the globe,” von der Leyen said. Groceries, transport and medicines will cost more, she said while visiting Uzbekistan. “And this is hurting, in particular, the most vulnerable citizens.”
Von der Leyen held off, however, from announcing new retaliatory measures and underlined that the EU was ready to negotiate with the U.S.
Analysts say there’s little to be gained from an all-out trade war, for the United States or other countries, since higher tariffs can lower growth and raise inflation.
“If Trump really imposes high tariffs, Europe will have to respond, but the paradox is that the EU would be better off doing nothing,” said Matteo Villa, a senior analyst at Italy’s Institute for International Political Studies.
“On the other hand, Trump seems to understand only the language of force, and this indicates the need for a strong and immediate response,” Villa said. “Probably the hope, in Brussels, is that the response will be strong enough to induce Trump to negotiate and, soon, to backtrack.”
Europe's strategy so far has been to limit retaliation to early tariff rounds to just a few politically sensitive goods such as bourbon and motorcycles in an attempt to push the U.S. to the negotiating table, rather than escalate an all-out trade war that could cripple its export-dependent economy.
Economists say the next target could be U.S. tech companies. They fall into the services category, where the U.S. exports more than it imports to Europe and thus would be more exposed to retaliation.
Financial markets were jolted, with U.S. stock futures down by as much as 3% early Thursday and a 2.8% drop in Tokyo’s benchmark leading losses in Asia. Oil prices sank more than $2 a barrel. Analysts fished for superlatives to a step that disrupts the global trading order and overturns decades of efforts to lower tariffs through trade talks and free trade agreements.
