Recently, Donald Trump had talked about imposing tariffs on account of an uncertainty in the NAFTA trade deal. Cecelia Malmstrom, the trade commissioner of the European Union, plans to retaliate by means of higher import duties. According to the plan proposed by Malmstrom, higher import duties will be imposed on products like peanut butter, orange juice, steel, cranberries, and industrial products.
A few days earlier, President Trump emphasized that the trade rules formulated by the EU made it impossible for the U.S. to be involved in business with the countries in the Union. Soon after this speech, Gary Cohn, the top economic advisor in the Trump administration, resigned.
According to the talks, the U.S. has proposed imposing a 25% tax on steel imports and 10% on aluminum imports. Th U.S. justified these tariffs by citing national security!
Ms. Malmstrom raised questions about the justification stating that it was impossible to see how the European Union could possibly be a threat to the U.S., considering that they are friends and allies in NATO. She also stated that the justification given by the U.S. was highly unjust.
EU plans to hold discussions with WTO
Ms. Malmstrom and the EU will be approaching the issue with the World Trade Organization in order to curb the side effects that may be caused by a sudden increase in tariffs relating to aluminum and steel imports. She criticized the U.S. for using the tariffs as an economic safeguard while disguising its reasons as a national security issue.
During the discussion at the World Trade Center, the EU will be taking measures to deal with the imminent economic loss. Ms. Malmstrom stated that the global overcapacity of steel and aluminum and massive state subsidies were the major problems associated with steel and aluminum.
If the proposed tariffs are implemented, it will have a disruptive effect on the EU. It will affect a large number of jobs and has to be countered with a proper response.
The EU is actively trying to convince the U.S. to rethink their proposed plan and emphasized that a trade war will never have any winners.
President of the EU, Donald Tusk, expressed his worries about an impending trade war between the U.S. and other countries. Contrary to what President Trump says, trade wars can have a detrimental effect on the countries involved.