Sat, 01 Feb 2025

How countries respond to Trump's tariffs is what matters next

Retaliatory taxes against the US by other nations could lead global trade into uncharted territory.

* The US has imposed tariffs on China, and President Trump is preparing similar measures against Europe and other countries.
* The world trading system has never seen a situation like this before, with the risk of a wider trade conflict increasing by the day.
* The goal of Trump's tariffs policy is unclear, as he changes his rationale regularly to coerce diplomatic change, address trade imbalances, or raise revenue.
* Western diplomats are trying to find ways to give the White House "wins" on trade numbers, but it's not clear if this is a genuine aim.
* Canada has vowed to retaliate against US tariffs "dollar for dollar", with Mark Carney warning that Trump only respects strength and urging other nations to stand up to him.
* European trade negotiators are avoiding direct criticism of the US, even as they stress cooperation and partnership on trade issues.
* The possibility of retaliatory tariffs on high-profile supporters of President Trump, such as Elon Musk, is being discussed as a way to put pressure on Congress to act.
* The impact of tariffs on US domestic prices and jobs is a growing concern, with entrepreneurs in the US, Mexico, and Canada warning of potential costs.
* Economists almost universally dispute Trump's claim that tariffs would not be a cost to the US.
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