Europe shows its teeth in the United States
The European Union's decision to impose tariffs on the United States, designed more politically than economically, is a sign that Brussels is willing to speak the same language as Donald Trump and show its teeth to those who would harm it. It's no coincidence that the European Union is the world's largest consumer market, and while tariffs can cause problems, it also has the capacity to turn back.
Brussels has carefully chosen its targets to reach the estimated cost of the tariffs on European steel and aluminum of 26 billion euros. In some cases, it involves punishing iconic brands such as Levi's clothing, Harley-Davidson motorcycles, or bourbon whiskey. In other cases, it aims to target especially important sectors in Republican-majority states. This will tax imports of soybeans, which are produced primarily in the state of Louisiana, where House Speaker Mike Johnson is from, as well as timber, which comes from key states in Trump's victory, such as Alabama, Georgia, and Virginia. "We will be smart and try to hit where it hurts," they say from Brussels. These tariffs are designed to wear down Trump and force him to back down.
It's difficult to know how the US administration will react to the European measures, but there's no doubt that Trump faces a serious problem, as this type of trade guerrilla warfare he's launched with half the world could backfire in the form of rising inflation, rising unemployment, or even more. The nervousness in the markets seen these days is a sign that the euphoria of Wall Street in the early days of Trumpism is beginning to evaporate.
Trump, by the way, continues to push all the boundaries possible for an American president. His photo with a Tesla in the White House, advertising a car brand owned by one of his advisors, is completely out of place and can only be understood politically. Since Elon Musk's companies are being boycotted in Europe and elsewhere around the world, now it's time to support him. But what will the rest of the American car manufacturers think?
And not only that, what will producers think when they are affected by the tariffs or the boycott campaigns against American products that are being organized in many of the countries that feel attacked by Trump? Will they continue to support him or will they distance themselves? The Trumpist dynamic of the economy is diabolical, because right now, American companies that dare to confront the White House tenant risk a boycott from his supporters, but if they don't, they will also suffer a boycott outside their borders.
As the President of the European Commission, Ursula von der Leyen, has said, no one will win in a tariff war that will have a cost on prices and jobs. But Donald Trump needs to understand this.
