Trump's tariffs spark global economic tensions and uncertainties
Donald Trump described the decision to implement new tariffs as "the beginning of making America rich again." The regulations are set to take effect in March and will apply to shipments from all countries without exception. Economists are skeptical about the effects of the U.S.'s 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 tariff charges, although meant to support domestic steel and aluminum producers, could significantly increase production costs in industries heavily reliant on these metals, such as automotive and construction. These additional burdens will most likely be passed on to American consumers.
Professor Meredith Crowley at the University of Cambridge highlights that the greatest harm will be inflicted on low-income Americans, many of whom voted for Trump. An increase in car prices by around $1,000 may 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 about 7.2 million tonnes last year. Prime Minister Justin Trudeau described these penalties as completely unjustified and announced a firm resistance.
The European Union has 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 exemption from the tariffs. Trump expressed willingness to consider Australia's request due to the U.S.'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 the tariffs, potentially in exchange for access to rare earth elements essential for American tech companies. Last year, Ukraine's export of metal products to the USA amounted to $500 million, constituting nearly 58% of its total exports to that country.
