It looks like China isn’t the only major economies that might impose tariffs on US imports. The European Union is also preparing tariffs on $20 billion’s worth of American products. These measures come as a response to the 20% tariff that the US could impose on cars imported from the European Union region. The tariffs that are being prepared by EU will apply to the general categories of goods imported from the US such as machinery, technology, and agricultural goods. Alexander Winterstein who is a spokesperson for the European Commission commented: “If [car] tariffs were to be imposed then we need to take countermeasures and we are ready for that, we are ready to act immediately and we are ready to react adequately”. Cecilia Malmstrom, EU trade commissioner also commented on the issue, saying: “We hope that it doesn’t come to that and that we can find a solution. If not, the EU Commission is preparing a rather long list of many American goods. It would be around $20 billion”. This won’t be the first time the European Union imposed retaliatory tariffs on US goods. The EU has already placed tariffs on over $3.3 billion worth of products as a response to the US metal tariffs.
Jean-Claude Juncker to meet Donald Trump at the White House on Wednesday
On Wednesday, there is supposed to be a meeting between the president of the United States and the president of the European Commission, Jean-Claude Juncker. It is almost certain that the tariffs will be a major discussion point during the meeting. Donald Trump tweeted about the meeting: “The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready – but they won’t!” President Trump is emphasizing the responsibility of the EU for the trade war. In another tweet, he said: “Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that — and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!”
US prepares for the consequences of the trade war
The trade war is already having an effect on economic activity and the US is preparing for its consequences. With the country being actively flaunting tariffs on multiple fronts, the recipient countries are likely to reciprocate, which will indubitably hurt the US economy. For this reason, the Trump administration has prepared a plan to offer farmers hit by the trade war up to $12 billion in aid. “President Trump has promised since day one that he had the back of every farmer and rancher,” – commented Sonny Perdue, the Secretary of Agriculture. The aid to the farmers will come in various forms. Some producers will be paid directly while others will get assistance with distributions.
Some of the farmers don’t see the aid as a long-term solution to the problem and instead ask for the elimination of tariffs. The American Soybean Association commented on the issue:”While soybean growers appreciate the Administration’s recognition that tariffs have caused reduced exports and lower prices, the announced plan provides only short-term assistance. ASA continues to call for a longer-term strategy to alleviate mounting soybean surpluses and continued low prices, including a plan to remove the harmful tariffs.” With the trade war escalating on multiple fronts and the EU threatening to impose tariffs on agricultural products as well, the situation for the farmers is only headed for the worse.