In March 2018, the Trump Administration imposed tariffs on aluminum and steel imports from most countries. Four months later, he expanded those tariffs to imports from Canada, Mexico, and Europe. While the tariffs on Canadian and Mexican imports were lifted within a year, the ones on EU imports remain. The US president believes other nations have been cheating on trade agreements and this action is needed to make trading fair again.
This is a stark departure from US trade policy that has existed since World War II. Every US president since then has generally supported free trade–these tariffs run counter to that. These tariffs even undermine rules set by the World Trade Organization—an organization established in 1995 through US leadership. Nations have crafted their own tariffs in response and have begun to enact new trade agreements that bypass the US altogether—something that could have long-term consequences for US firms.
However, some believe that the tariffs will have a greater social impact than economic impact. The tariffs are only being applied to about $41 billion worth of imported material. Far more concerning is the rupturing relationships between allies, particularly with the EU. While some foreign leaders see these actions as the impulses of one president, others see it as a sea-change in US attitude toward them. “It will be hard to establish trust again,” says Adam Posen, president of the Peterson Institute for International Economics.
While these tariffs may eventually be removed, one resulting issue that will linger permanently is the inescapable conclusion of how personality-dependent and fragile relationships between regions really are. Inherently, a relationship between regions, such as Europe and North America, is more fragile and tenuous than are relationships within a region, where countries have to depend on each other due to geography. Trump tariffs may have awakened people to a reality that they really knew existed deep-down but didn’t want to admit.
References:
Washington Post, “Trump’s trade moves shake global system,” 3 Jun 2018, A1.
Wikipedia, “Trump tariffs,” 31 Oct 2019.
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