05.10.2022

EU prepares US response in “trade war”

The European Union will begin to levy import duties of 25% on certain US products. This is a response to US tariffs imposed on steel and aluminum earlier this month.

Such tooth-by-tooth actions can develop into a full-fledged “trade war”, especially if US President Donald Trump fulfills his threat, which promises to affect European cars.

The European Commission formally adopted a law establishing duties on goods in the amount of € 2.8 billion ($ 3.2 billion), on goods from the states: steel, aluminum, agricultural products such as corn and peanuts, bourbon, jeans and motorcycles.

“We don’t want to be in that position,” said Cecilia Malmström, EU Commissioner for Trade. She added that the “one-sided and unreasonable” US decision deprived the EU of a choice.

She called the EU’s response proportional to the relevant rules of the World Trade Organization and stated that they would cancel them if Washington abolishes its duties on metals. Steel and aluminum exports to the EU currently total € 6.4 billion.

Donald Trump greatly surprised the EU, Canada and Mexico with tariffs of 25% for steel and 10% for aluminum in early June, canceling the possibility of exemption from duties, which was introduced in March.

Canada has announced that it will impose reciprocal export tariffs of $ 12.5 billion from July 1. Mexico set tariffs for American products, such as steel, pork, bourbon, two weeks ago.

Some selected products target Republican states that seek to maintain control of both houses of Congress in the upcoming November elections.

The EU also holds from 10% to 50% of the reserves of possible tariffs, so in three years they can impose another € 3.6 billion on imports from the United States.

Germany at gunpoint

US trade with Germany: 1997-2016

Trump’s propaganda trade practice would be disastrous for EU countries. American metal tariffs are just the beginning, given that Trump is interested in a drop in European car exports to the United States. The White House could go further by calling on the EU to increase NATO funding and demanding that Germany stop building an oil and gas project with Russia.

Germany will suffer the heaviest losses in US and EU trade. German manufacturing companies have always remained strong American competitors, which Trump does not like. Trump team members may agree that the time has come to teach the German manufacturing giants a lesson when it comes to competition with the United States.

The EU must confront the United States. Peace and justice can be an impossible task if there is no willingness to fight. EU countries striving only for kindness themselves will suffer from the actions of American troops.

Obviously, there is a difference between US-EU relations and Sino-US relations. The political implications of a potential “trade war” with China are different. Therefore, few people from China believe that the EU will side with China in confronting the United States. The EU endorsed Washington’s past protectionist efforts, putting pressure on China in the area of ​​intellectual property rights and market access. China, the US and the EU pursue their national interests. The situation makes it difficult for both sides to become allies for each other.

The Trump administration showed no respect for the rules established by the WTO. Europe and China oppose the mockery of the United States and its trade protectionist practices. If large economies do not intervene, they will not spare anyone, and Trump will turn into modern Genghis Khan, who captured Eurasia.

China and the EU may not cooperate on US trade issues, however, the two powers are required to maintain a firm stance in clashes with the United States. Both China and the EU must make unreasonable concessions to the United States, since Trump does not want to cooperate with the world and prefers to use siege tactics related to trade to conquer foreign countries.

If each of Washington’s unilateral tariffs comes up against reliable counterattacks, this will become an obstacle to the protectionist agenda. Such reckless behavior will result in big losses for ordinary Americans and will heat up the already volatile internal situation.

China has provided strong countermeasures against Trump’s tariffs and will use them as a bargaining chip against Washington stocks.

Shortly after the United States withdrew from Iran’s nuclear deal, they asked European enterprises to leave the country. Many European companies have done the same with the Chinese smartphone manufacturer ZTE. If Europe continues its retreat, it will be in the role of a lifeless doll controlled by an impulsive puppet.

If the current multilateral trading system collapses, the welfare of each EU member state will be in danger. So the EU must abandon the idea of ​​a possible exemption from US tariffs and begin preparations for the upcoming “trade war.”

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