In
response to America's steel & aluminum tariff plan, the European
Commission has drawn up a list of American products to impose tariffs
on, ranging from orange juice to motorcycles.
The proposal needs the approval of EU member states, but if it does go ahead, it will likely lead to US retaliatory measures, which would then spark a trade war.
The onset of a major trade war can result in significant negative side effects, ranging from inflation & higher interest rates, to multinationals taking losses on capital investments abroad.
The proposal needs the approval of EU member states, but if it does go ahead, it will likely lead to US retaliatory measures, which would then spark a trade war.
The onset of a major trade war can result in significant negative side effects, ranging from inflation & higher interest rates, to multinationals taking losses on capital investments abroad.
*It did not take long after President Trump proposed tariffs on imports of steel & aluminum of 25% & 10% respectively, for one of America's main trade partners to announce counter-measures meant to hurt American products in kind. As is the case with many things in the EU it now has to seek the approval of each individual country, which means that it is by no means a done deal.
*If it does get approval from all EU states
however, it will mean that a number of US products, ranging from metals
& other industrial goods, to orange juice may be affected.
*At this
point, based on an article I read on a Romanian news site, the total
value of American goods affected with a proposed 25% counter-tariff is
estimated at $3.5 billion.
*This by itself is by no means a huge hit to
American economic interests, but the inevitable question arises whether
this might be only the beginning of a trend which will lead to more and
more trade barriers between the world's two largest economies, and
perhaps throughout the world.
Read more: EU Counter-Tariffs Proposal Is Raising Prospects Of Trade War | Seeking Alpha
