The trade war between America and Europe is “going to get nasty”, a European investment bank has warned. Inga Fechner and Ewa Manthey, at ING, warned that “a clash with Europe is inevitable” as Donald Trump ramps up tariffs on the EU and other countries. They said: “President Trump has laid the foundations for further trade escalations. This will not be the last tariff move. Retaliation is on, and it’s going to get nasty.”.
The European Commission has warned that it will not hesitate to retaliate against fresh tariffs. “The EU sees no justification for the imposition of tariffs on its exports. We will react to protect the interests of European businesses, workers and consumers from unjustified measures,” the Commission said. Its president, Ursula von der Leyen, said: “Unjustified tariffs on the EU will not go unanswered - they will trigger firm and proportionate countermeasures.”.
Yesterday, Olaf Scholz, the German chancellor, said: “We can only say with great caution but great clarity: anyone who imposes tariffs must expect counter-tariffs.”. Donald Trump has indicated that he examining further tariffs on the EU and has said he will soon impose reciprocal tariffs on all countries, matching the tariffs levied by them. Last night, he confirmed that he would impose blanket 25pc tariffs on steel and aluminium imports into the US, including from Europe.
Mr Trump has repeatedly criticised the European Union, saying they “don’t take our cars, they don’t take our farm products. They take almost nothing and we take everything from them”. Read the latest updates below. Thanks for joining us today as we’ve covered the latest on US tariffs. You can read all our latest stories on the economy and business here. Britain is at risk of a £24bn blow to the economy should Donald Trump forge ahead with “reciprocal tariffs”, analysts have warned.
The UK is facing the prospect of 21pc tariffs on goods exports to the US if the president imposes duties on Britain based on VAT charges, Deutsche Bank has warned. Tariffs of this scale would knock 0.4 percentage points off UK GDP growth for the next two years, according to Ahmet Kaya, of the National Institute of Economic and Social Research (Niesr), accounting for $30bn (£24bn). Mr Trump has vowed to announce “reciprocal” tariffs by Wednesday, meaning he will match rates levied by other countries on goods they import from the US.
“If they charge us, we charge them,” Mr Trump told reporters on Sunday. If the White House applies reciprocal tariffs based on existing levies on US exports then the UK will likely come out unscathed in a trade war, as economists predict it will mean a charge of just 1pc on exports to the US. However, fears are mounting that the Trump administration will apply reciprocal tariffs based not just on existing tariffs, but also on VAT policy.
Read the full story... Donald Trump’s trade policy is adding “a lot of cost and a lot of chaos” to American businesses, the chief executive of Ford, Jim Farley, has said. Ford is considering areas in which it can build up inventory to prepare for potential fresh tariffs on imports from Mexico and Canada, executives said today. Mr Trump planned to initiate those duties earlier this month, before delaying them until March.
It comes as US manufacturers reliant on steel and aluminium imports are searching for ways to keep their profit margins in tact after Donald Trump’s move to slap new tariffs on those key metals. Companies ranging from Coca-Cola and to aerospace and appliance firms expect to be affected by Mr Trump’s moves. But the White House’s frequent threats of various shapes and sizes have left executives and investors unsettled. They say there is a lack of certainty over whether the latest salvos will come to pass, or whether exemptions could be carved out for companies that lobby Mr Trump.
“There’s so much we don’t know. We don’t know if they will go in place. We don’t know if there will be exemptions at all,” said David Gitlin, chief executive of appliance maker Carrier Global. Coca-Cola said it could shift its imports to rely more on plastic bottles if aluminium cans become more expensive. Fragrance company Coty said it has boosted US stock levels and is increasing production of fragrances in North Carolina.
Brazil has no intention of entering a trade war with the United States, a government minister said today after US president Donald Trump imposed a 25pc levy on steel. Brazil is the second-biggest exporter of steel to the US (after Canada). Alexandre Padilha, institutional relations minister, said: “Brazil does not encourage and will not enter into any trade war. We will always be in favour of strengthening free trade even more.”.
