After starting a tariffs war with Canada, Mexico and China – albeit, with a lower percentage, President Donald Trump looks toward the European Union and the UK as recipients of his increased taxes.
Quoting a USD300bn as per AfP, President Trump wants to change the commercial dynamic between Europe and the US and plans to use similar tactics to the ones employed in his current, but also previous mandate.
According to the BBC, the US does register a trade deficit with the European Union, as it imports more than it exports towards the bloc. Eurostat data shows that 20 EU members have exported more to the United States than imported, the largest deficits being the ones with Germany, Italy, and Ireland – largely driven by the automotive industry in the case of the former.
The UK was also mentioned, but the US president seems to believe a no-tariffs resolve is much more likely in that case. So, what would these tariffs mean for the food industry? For one, higher prices for manufacturers, which will then be passed down to consumers. Some industries will be heavier impacted than others, with food and food processing somewhere in the middle.
It won’t just be European companies that are affected, though; a firm response is to be expected from Brussels, as was the case for Canada, where Prime-minister Trudeau swiftly imposed new taxes on American imports.
All off these retaliatory taxes will further burden the American manufacturer, distributer, and ultimately consumer. Donald Trump’s sweeping new tariffs on America’s three biggest trading partners—Mexico, Canada, and China—are a “colossal economic gamble” that could backfire spectacularly, warns Nigel Green, CEO of deVere Group.
“This is an extraordinary escalation of protectionist policy, one that risks igniting a full-scale trade war at a time when markets are already on edge,” he says.
That is indeed what is at risk, a sentiment echoed around the world. Let me know your take at bogdan.angheluta@trade.media