The US government has decided to impose import tariffs of 25 percent on steel and 10 percent on aluminum from Europe, Mexico and Canada. Other countries, including Japan, Washington’s closest ally in Asia, are already subject to the tariffs.
US President Donald Trump said he wants to punish trading partners that he claims have exploited poorly negotiated trade agreements to run up big trade surpluses with the United States.
What reaction has there been?
The EU has threatened to respond by targeting US products, including whiskey, blue jeans and motorcycles. David O’Sullivan, the EU’s ambassador in Washington, said the retaliation would probably be announced in late June. Mexico said the tariffs would distort international trade and announced it would penalize US imports including pork, apples, grapes, cheeses and flat steel. Canada plans to impose tariffs on $12.8 billion worth of US products, ranging from steel to yogurt and toilet paper.
How worried should we be?
Now that Trump has broken the taboo of imposing tariffs, critics fear that other countries will follow his lead. Oliver Rakau, an economist with Oxford Economics, told the Associated Press the tariffs could cause major economic damage because “the specter of an escalation is likely to weigh on business sentiment and may derail the investment recovery.”