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The EU Respond Angerly to Trump’s Steel and Aluminium Tariffs

Politics / Protectionism Jun 02, 2018 - 07:27 PM GMT

By: Ben_Jardine


This week, we witnessed Trump’s introduction of new tariffs of 10% duty on aluminium and 25% duty on steel from the EU, Canada and Mexico. This seemed to be on the cards since Trump’s election manifesto, as he was trying to ‘Make America Great Again’.

Intriguingly, this disputed move goes against the recent growth in the US manufacturing sector at the start of the year, as according the Wells Fargo Securities analysts: "Hiring in the manufacturing sector has been solid this year as the industry has shaken off last year's commodity slump, the dollar has weakened, and global growth has strengthened." Therefore, the weakened US Dollar allowing trans-Atlantic growth to be made which boosted the American economy prior to the new tariffs being implemented today.  

European politicians are not happy to put it mildly, Liam Fox, the UK government’s international trade secretary took time off from brokering the Brexit deal by noting that the new tariff move by the US was “patently absurd”. He went on to say that Trump’s decision was "just protectionism" and that "We absolutely do not rule out counter measures." Perhaps, Trump knows that casinos in UK flourish online which explains the gamble he decided to make in the destabilising his long-term partnerships with key allies.   

The EU is not hanging around too much licking its wounds as they are pressing ahead with their own response to Trump’s tariffs on steel and aluminium. The EU Trade Commissioner, Cecilia Malmström, is due to announce new tariffs on many American iconic products, such as Harley-Davidson, peanut butter, cranberries, bourbon whiskey and even Levi’s Jeans.

Federica Mogherini, the EU high representative on foreign policy followed by saying that “the European Union will today proceed with the WTO dispute settlement case adding those additional duties on a number of imports from the United States,” she added, that “the European Union measures will be reasonable, proportionate and in full compliance with WTO rules and obligations.”

It seems that Trump’s business acumen and entrepreneurial spirit is leading him to prioritise the interests of the USA first. However, it remains to be seen if this nuance of isolationism is going to make a real change for Americans as the tit-for-tat imposing of tariffs on goods from all sides may lead them to seek out new commodities which should encourage emerging markets as well as stable markets such as Japan, China and Australia.    

© 2018 Copyright Ben Jardine - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2018 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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