Transatlantic trade at risk: Tariff tensions escalate
The tariff conflict threatens transatlantic business valued at $9.5 (CAD 13.6) trillion annually, warned the European branch of the American Chamber of Commerce in a report titled "The Transatlantic Economy 2025," published on Monday.
According to the Chamber, whose members include Visa, ExxonMobil, and Apple, the tariff dispute jeopardizes the world's largest trading relationship, Reuters reported, recalling that last week the US administration imposed tariffs on steel and aluminum imports, to which the EU responded with a similar measure.
The Chamber noted that trade is only part of the transatlantic exchange, and the real point of reference is investments.
Contrary to conventional wisdom, most U.S. and European investments flow to each other, rather than to lower-cost emerging markets, said Daniel Hamilton, the report's author, as quoted by Reuters.
Side effects
- Ripple effects of conflict in the trade space will not be confined to trade. They ripple through all of those other channels and the interactions are quite significant - warned Hamilton. He believes there is a risk of the tariff war spreading to trade in services, data, or energy flow because Europe is dependent on LNG imports from the US.
American President Donald Trump justified the start of the tariff war based on the surplus of European goods exports to the United States. However, there is simultaneously a surplus of American services exports to the EU, reminded Reuters.
