The announcement by President Trump of radical prices on American trade partners has expanded the flaw between the United States and some of its closest allies while reconfiguring the world economic order.
Mr. Trump’s plan, which he unveiled on Wednesday and calls “reciprocal”, would impose a wave of prices on dozens of countries. Among the most important business partners in America affected by the European Union, which will face 20% of prices within the framework of the plan, and China, which will absorb 34% additional in addition to existing samples.
The new prices represent “a blow for the world economy,” said Ursula von der Leyen, president of the European Commission on Thursday morning. “The global economy will suffer massively. The uncertainty will be in a spiral and will trigger the rise of additional protectionism. ”
Mexico and Canada, which have particularly close economic relations with the United States, would not be subject to new rates beyond the samples that the president had previously announced, on imported vehicles, vehicle parts, steel, aluminum and any other commodity not exchanged under the rules of the American-mexico-specialty agreement.
The new samples include a line basic price of 10% on all countries, except Canada and Mexico, as well as additional prices based on prices that other nations apply to American exports and other obstacles that the administration has deemed unfair.
Asian countries have been among the hardest. The prices on Japan and India will be more than 20%, with nations such as Vietnam, Cambodia, Bangladesh and Sri Lanka faced with even higher rates.
Requiring, an analysis company, has calculated that the burden could be the heaviest on Chinese exports, which would risk $ 149 billion in additional prices, while Vietnamese products are confronted with $ 63 billion, Taiwanese products 37 billion dollars and Japanese products 36 billion dollars. The company described the announcement a “change in monumental policy which will reshape the supply, prizes and geopolitical strategy”.
The assault to several brothers left the global partners in shock.
“The consequences will be disastrous for millions of people worldwide,” said Von Der Leyen in her early Thursday morning declaration. “There does not seem to be an order in trouble, no clear path to complexity and chaos that are created.”
European allies have announced their intention to retaliate to an anterior wave of steel and aluminum prices, and they have been clear that they will respond to the growing trade conflict with new measures if negotiations fail – including, potentially, by creating obstacles to services such as large technological companies.
The EU’s response is relevant because, taken as a whole, its 27 nations constitute what is undoubtedly the most important economic relationship in America: they alone send almost a fifth of American imports, and European consumers are a huge market for American services.
Others have adopted a more awaited approach.
Prime Minister Anthony Albanese of Australia said that the United States imposing 10% tariffs in the country had “no logic”. But Australia would not run to retaliate, he said, saying that the country “would not join a race on the merits, which causes higher prices and slower growth”.
In Mexico and Canada, there was a feeling of mute relief to avoid a new series of prices. “This is good news for the country,” said Luis de la Calle, a Mexican trade economist. “This allows us to protect our access to American markets.”
But analysts have warned of too much optimism, because the two countries are already faced with a series of recently imposed samples. Trump said prices in Canada and Mexico are aimed at limiting fentanyl flow in the United States.
“He has preserved a number of important elements of our relationship,” said Prime Minister Mark Carney of Canada, “but the fentanyl prices are still in place.” Mr. Carney, who briefly spoke to a meeting of the cabinet, added: “We are going to fight these prices with countermeasures.”
The common thread is that many American friends find themselves increasingly playing in defense against Washington, a posture that could change international relations and the world order for years to come.
And many wonder what the final objectives might be.
Trump sometimes argued that he wanted to force companies, including car manufacturers and drug manufacturers in the United States. He also said that the goal was simply to rectify injustice. And he said the prices will help pay tax discounts.
For US global partners, the goal is important. If the goal is to make the trade system more equitable, it would suggest an opening to negotiation. Europe could play with all prices on cars, for example, to try to press the Trump administration to adopt a less aggressive position.
If the goal is to collect funds for American chests, it is a more difficult starting point for business partners. In this case, finding an agreement that reduces the expected prices would mean reducing potential income.
Given uncertainty, the American allies have tried to learn as much as they can on what is coming, while deploying measured answers.
Europe, for example, has taken a more aggressive posture than many individual nations – announcing plans for reprisals on whiskey, motorcycles, agricultural products and a wide range of other products in response to steel and aluminum samples. But he has already delayed these measures until mid-April, and the decision-makers have not yet announced exactly how they will react to the last tariff cycle.
Instead, officials have clearly indicated that they are ready to respond with force – including, perhaps, using a recently created tool that would allow them to relatively quickly place penalties such as prices or market access to American technological companies.
The objective would be to gain a lever effect. EU nations try to throw the weight of the block consumption market to force Washington to negotiate.
But the plans to repel were made more difficult because other geopolitical subjects have become closely linked to the commercial conflict.
For example, military objectives and technological regulations have been taken in broader debates on trade.
Nations that might want to postpone new prices – including Japan, South Korea and Europe – are faced with the risk that America withdraw from its long -standing military role. Trump urges countries to assume the burden of their own defense more.
Trump also wants Europe in particular to write restrictions on large technological companies, including regulations intended to ensure that they apply content standards and have targeted the EU consumption tax system.
The question is how fast the American business partners will now react. European leaders, for example, clearly indicated that they first wanted to digest the details of the last series of prices.
But they were also clear that they will retaliate if everything else fails.
“They do not want to degenerate – the desire is to make agreements,” said Mujtaba Rahman, Managing Director for Europe of the Eurasia group, a political research company. But, he added, “you must bend the economic muscles to be credible with this administration.”
Paulina Villegas MEXICO’s contributed report; Ian Austen from Windsor, Ontario; And Victoria Kim de Canberra, Australia.
