“Yes, it’s a trade war,” is the clear diagnosis of WiFo boss Gabriel Felbermayr. At the same time, in his opinion one should “not use too much”. In addition to the rates for the entry of the US, the EU economist advises “needles” against the US. These can be quite effective.
These are, for example, export tariffs for products that are only produced in Europe, such as certain pharmaceutical agents or machines for chip production. “That would be difficult for the Americans to cope,” Felbermayr told the DPA press agency.
With his almost global customs strategy, US President Donald Trump wants to strengthen domestic production and move trading partners to concessions. Felbermayr indicates how much the EU suffers from the duration of the measures. If the 20 percent extra rates for the EU exports and the 25 percent surcharges on cars and metal until 2027, “we would expect that trade will fall by 20 to 40 percent.”
“The good thing about the trade is that you can end them again very quickly,” says Felbermayr. According to him, an ideal solution for the conflict would be if both parties agreed on a closer trade cooperation.
The European Union is planning this
In the early Wednesday morning, the new American rates came into force against half the world. Significantly higher taxes apply mainly to those states with which the US has a particularly high trade deficit according to government information. 20 percent apply to the entire European Union. China is particularly difficult with a total of 104 percent special rates.
Before noon, the EU is expected to agree on the first countermeasures for the American steel and aluminum rates that had already taken effect before the large package of Trump. Unlike original plans, there will probably be no extra rates on American whiskey. According to EU circles, approximately 25 percent of soybeans, clothing and iron, steel and aluminum goods are available. Ten percent must be due to other goods. In total, the list must contain 66 pages.
Trump convinces: “Golden Age is coming”
It is the most aggressive intervention of the government of Trump in global trade policy. Trump is still convinced that the “Golden Age” of the United States will start. With his customs policy, US president wants to strengthen domestic production and at the same time go to concessions for foreign trading partners. The expected extra income should also help to prevent at least partial tax cuts in the election campaign in the election campaign.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
