Eu's Hold on Trade Tensions - EU's Counterattack Against Trump's Tariffs
Tensions escalating: China and Trump butting heads over EU counter-tariff list - Unified front of China and Trump: EU announces retaliatory tariffs
Trade tensions continue to escalate globally, with no relief in sight from U.S. President Donald Trump. In the face of impending U.S. tariffs on nearly all countries, the White House has made it clear that the higher duties will not be suspended. Meanwhile, China shows no signs of surrender either. In response, the EU Commission is eyeing counteractions to the new U.S. tariffs.
According to White House spokesperson Karoline Leavitt, Trump takes no intentions to defer or extend the tariffs, for they're to be enforced at 0:01 AM local time (6:01 AM CEST) on Wednesday. This includes steep tariffs against China, escalating the total to 104 percent.
Trump in Wait
President Trump remains optimistic that China seeks a deal with the United States. Leavitt noted that China's retaliatory measures were a mistake. “When America is hit, it hits back harder,” she said, asserting Trump's belief that China wishes to work towards an agreement but lacks the means to approach it. "And the President wanted me to tell you all that he will be incredibly merciful if China extends its hand for an agreement, but he will do what's best for the American people," Leavitt added. Previously, Trump had indicated he was awaiting a call from China.
In light of Tuesday's announcement of additional tariffs of 50 percent for China, Trump's aggressive trade policy continues to cast a cloud of uncertainty over the global market.
Signs Point to Escalation
The Chinese Ministry of Commerce has stated that China will respond proportionately if the U.S. persists with its new tariffs. If the U.S. proceeds with the tariffs, “China will definitely accompany them to the end,” the ministry cautioned, translating to a drawn-out battle with increasing trade burdens for both countries, the world's largest economies.
Brussels on Countermeasures
The EU is not planning to impose additional tariffs on American whiskey, easing tension on both sides. However, the EU is still weighing its options for countermeasures to combat the new U.S. tariffs on steel and aluminum imports, measures that impact €26 billion in exports and could potentially generate €6.5 billion in additional tariff revenue for the U.S.
Initially, the EU's countermeasures were expected to total nearly €21 billion, targeting soybeans, motorcycles, and orange juice. The first phase was set for implementation next week, followed by a second and third phase in mid-May and December, respectively. However, negotiations were put on hold following Trump's 90-day tariff reprieve.
EU May Trade Energy for Tariff Reduction
Trump has suggested that the EU increase its purchases of American energy as part of a broader trade agreement. This could potentially lead to reciprocity and balancing trade relations, providing the EU with leverage to negotiate more favorable tariff rates for industrial goods like steel and aluminum. However, the EU's proposal for a "zero-for-zero" tariff deal on all industrial goods remains unacceptable to the U.S.
The ongoing energy trade negotiations add an intriguing dimension to the tariffs issue, with both sides seeking a mutually beneficial agreement. However, the environmental and economic consequences of depending on liquefied natural gas from the U.S. should be carefully weighed.
Energy expert Claudia Kemfert has criticized Trump's proposal, suggesting that it would result in environmentally damaging and expensive energy imports. Instead, savings and diversification of energy sources could be more advantageous for the EU, as it can procure gas from various countries and, in the process, reduce its reliance on a single market.
Sources:1. https://www.schengenvisainfo.com/news/eu-issues-warning-to-the-us-as-trade-tensions-heighten/2. https://www.reuters.com/article/us-eu-usa-tariffs/eu-commission-reveals-list-of-us-products-in-line-for-tariff-hike-idUSKBN1FD10J3. https://www.cnbc.com/2018/03/08/eu-may-Fall-behind-on-aluminum-before-trump-tariffs-Take-effect.html4. https://www.Bloomberg.com/news/articles/2018-03-08/european-commission-announces-list-of-u-s-products-for-tariff-hike5. https://www.cnn.com/2018/03/08/politics/eu-tarrifs-list/index.html
- Despite the EU Commission's consideration of countermeasures to combat the new U.S. tariffs on steel and aluminum imports, they have chosen not to impose additional tariffs on American whiskey, aiming to ease tension between the two parties.
- White House spokesperson Karoline Leavitt announced that President Trump has no intentions of deferring or extending the tariffs, which are set to be enforced at 0:01 AM local time (6:01 AM CEST) on Wednesday, and will affect many EC countries, including steep tariffs against China.
- Trump has suggested that increasing the EU's purchases of American energy could potentially lead to reciprocity and balancing trade relations, providing the EU with leverage to negotiate more favorable tariff rates for industrial goods like steel and aluminum, a proposal that remains unacceptable to the U.S. at the moment.
