Trump's tariff gamble risks sparking global trade tensions
Donald Trump described the decision to introduce new tariffs as "the beginning of making America rich again." The regulations are set to take effect in March and will cover shipments from all countries without exception. Economists, however, are skeptical about the effects of this move.
Economists strongly question Trump's optimistic vision of a new "golden age" for the USA. According to Abigail Hall Blanco, an economics professor at the University of Tampa, academic literature clearly indicates that tariffs cause significant losses to all parties involved, reports Deutsche Welle.
The new tariffs, although intended to support domestic steel and aluminum producers, could significantly increase production costs in industries that heavily use these metals, such as automotive and construction. These additional costs are likely to be passed on to American consumers.
Professor Meredith Crowley from the University of Cambridge emphasizes that low-income Americans will suffer the most damage, many of whom voted for Trump. An increase in car prices by a thousand dollars could prevent many families from purchasing a new vehicle.
International repercussions and reactions
Canada will be most affected by the new tariffs as the largest exporter of steel to the USA, with a volume of 7.3 million tons last year. Prime Minister Justin Trudeau described these penalties as completely unjustified and promised a strong response.
The European Union also announced protective measures for its economic interests. Ursula von der Leyen, President of the European Commission, warned of proportional retaliatory measures in response to the unjustified tariffs.
Some countries, including Australia, are seeking exemptions from the tariffs. Trump expressed willingness to consider the Australian request due to the U.S. trade deficit with that country. India, ahead of Prime Minister Modi's visit to the White House, has already reduced tariffs on dozens of imported goods.
Ukraine hopes to avoid tariffs, potentially in exchange for access to rare earth elements necessary for American tech companies. Last year, metal product exports from Ukraine to the USA amounted to $500 million, accounting for almost 58 percent of Ukraine's total exports to that country.
