Categories U.S. Markets News

Trade war fears linger even as EU mounts pressure on Washington

Though a diplomatic intervention by the Congress had earlier alleviated the threat of a full-fledged trade war, the response of European countries to President Trump’s move to impose tariffs on steel and aluminum imports signals the global trade scene could be heading for a significant change.

Apparently, the import tariffs did not go down well with the European Union. The general perception in the region is that the new regulation would jeopardize the economic health of both the economies.

Picture Courtesy: Theloadstar

While the initial response from Europe was of retaliation when Trump reaffirmed his stance, Germany seems to be hopeful of reaching a truce with Washington on the issue.

Meanwhile, sensing the dangers of a one-sided levy on imports, the EU heads have begun a process to identify American products that could be brought under a new tax system. The move, which could be seen as the beginning of a trade stand-off between the two continents, would put Washington on the defensive.

The efforts by Chancellor Angela Merkel to explore the possibility of a diplomatic solution gathered momentum when Germany’s economy minister

left for the U.S. the other day to hold talks with his counterparts there on re-establishing ‘free trade.’ The growing clout of German products in the local market has been a cause of concern for Trump, whose first target is China.

Germany seems to be hopeful of reaching a truce with Washington on the issue

While Germany and China are unlikely allies on the economic front, Merkel’s gesture to the Asian county for strengthening bilateral ties could put more pressure on Washington to ease the terms of its new import regulation, which is a pre-condition for Altmaier’s talks to bear fruit.

Though the German government and the European Commission have taken different routes for resolving the tariff crisis, their underlying goal is to have Europe exempted from the import tariffs proposed by Trump — 25% on steel and 10% on aluminum.

So, what happens if the attempts to have the names of European Union countries removed from Washington’s tariff list failed? In such a scenario, the Commission would retaliate by imposing duties of up to 25% on products imported from the U.S. A tit-for-tat policy of that sort could mark the beginning of the much-feared trade war.

Most Popular

FDX Earnings: FedEx Q1 adjusted earnings drop; revenue up 5%

Cargo giant FedEx Corporation (NYSE: FDX) Thursday reported a decline in first-quarter adjusted earnings, despite an increase in revenues. The company also provided guidance for fiscal 2023. Net income, adjusted

Key highlights from Darden Restaurants (DRI) Q1 2023 earnings results

Darden Restaurants, Inc. (NYSE:DRI) reported first quarter 2023 earnings results. Total sales increased 6.1% year-over-year to $2.4 billion, driven by blended same-restaurant sales growth of 4.2%. Net earnings amounted to

ACN Earnings: Key quarterly highlights from Accenture’s Q4 2022 financial results

Accenture (NYSE: ACN) reported fourth quarter 2022 earnings results today. Total revenues were $15.4 billion, up 15% year-over-year in US dollars and up 22.4% in local currency. Net income attributable

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top