Trump and his perverse tariff game

BarcelonaThe uncertain and unpredictable trade war launched by US President Donald Trump reached a new chapter this Thursday with the agreement reached with British Prime Minister Keir Starmer. With his characteristic triumphalist tone, the head of government of the world's leading economic power is once again treating traditionally partner countries like little children. It's as if he were saying: "If you get along, I'll lower your tariffs."

The current US president's approach undermines traditional diplomacy and uses tariffs ("the nicest word," as he said in one of his surprising interventions) as a negotiating tool, not to say a highly intimidating one, in a kind of perverse game. The pact with London, the details of which "will be written in the coming weeks," in his unusual way, is intended to be a message to other partners and seeks to serve as a kind of template to apply to other trade agreements that, as he has announced, are being negotiated. Therefore, the agreement would include—the conditional statement is because nothing can be guaranteed with Trump—a reduction from 25% to 10% in the tariffs on steel, aluminum, and automobiles. In return, the doors to the British market will be opened to Americans for beef, poultry, ethanol, soft drinks, cereals, and other products.

In any case, trade relations, no matter how much Trump insists on the benefits of the agreement, are moving from a scenario with 0% tariffs to one characterized by import tariffs. Despite the pact, a universal 10% tariff is in place, which Trump seems unwilling to remove at any point, and which will further increase the cost of exports to that country. This situation has led both governments and entities to calculate the cost of these taxes on imports. One of the most recent was made by the Barcelona Chamber of Commerce. which has estimated it at around 1.055 billion euros this year in CataloniaIt doesn't have an extremely high impact, but in the long run it could lead to a reduction in sales in other European countries, which will be much more affected, such as Germany.

In this context of uncertainty and unpredictability in the face of Trump's actions, Brussels is right to prepare a list of US products on which to impose tariffs. Once the ninety-day grace period granted has expired, the US president decides to apply the tariffs he announced to European Union (EU) products. The list that the European Commission has proposed to member countries would affect imports with a total value of around €95 billion. This list, which will be added to the one decided last month and frozen pending Washington's action, includes thousands of items, ranging from all types of livestock and agri-food products to electrical machinery, vehicle components, helicopters, and airplanes. If they end up being applied, they will affect, for example, industrial giants like Boeing, which would surely end up resulting in burdens for the European consortium Airbus, in a kind of unwelcome game of action-reaction that trade wars always entail.