Worker with steel coils [Photo: ArcelorMittal]
The global tussle prompted by President Trump over trade tariffs is well and truly heating up. His economic campaign against nations across the globe through tariffs is quite a brouhaha, expanding with almost daily developments.
It all kicked off with Trump slapping a 10 percent tariff on China. Beijing, rather predictably, retaliated with its own duties on a variety of US products including liquified natural gas and farm machinery to the tune of $14 billion. Not content with that, Trump went ahead and declared a 25 percent tariff on all steel and aluminium imports entering the US.
The declaration came as quite a surprise to many. Trump shared the news with journalists on his way to the Super Bowl, stating: “Any steel coming into the United States is going to have a 25 percent tariff. Aluminium too.”
The US’s principal suppliers of steel, Canada being the largest, followed by Brazil, Mexico, South Korea, and Germany, are now scrambling. Canada is particularly at the heart, accounting for 44 percent of America’s aluminium supply.
### The European Conundrum
It doesn’t end at the North American corridor. Trump now has his eyes set on Europe. Describing the EU’s treatment of the US as an “atrocity,” he’s made clear his disapproval. He firmly claimed Europeans buy “almost nothing” from the US. Furthermore, the European Union’s machinery, pharmaceuticals, and automotive industries appear to be in Trump’s crosshairs.
Robert O’Brien, a notable Trump ally, reckons Europe might be gearing up for quite the trade showdown. However, the European Commission has shown resilience, formulating their own plans to counteract US tariffs, leaving no option off the table.
Interestingly, there’s division within the EU. While some, with Christine Lagarde’s encouragement, suggest appeasing Trump with more purchases of US goods, others fear this would only lead to further demands.
### The China Angle
China remains a consistent topic in this economic dialogue. Despite being a minor steel exporter to the US, it’s nevertheless on Trump’s longer-term radar. As observed by The New York Times Keith Bradsher, China has become a behemoth in global steel production, producing more than the rest of the world combined. With internal consumption slowing, export markets are growing ever more vital for China’s surplus production.
### Underlying Objectives
It’s clear the tariffs aren’t just about economics, they’re strategically layered. Tariffs, whilst potentially inflating US revenue, also heighten the cost of goods for American consumers.
Further still, the tariffs are geopolitically charged. The US dollar’s global stronghold is at play, and maintaining this becomes imperative. Concurrently, Trump has mused over a depreciated dollar for competitiveness, contradicting efforts to sustain reserve currency status.
### A Neoimperial Epoch?
Amidst the flurry of tariffs and trade tensions, certain commentators have deemed this a new age of Neoimperialism. Gideon Rachman of the Financial Times shed light on what seems to be an intricate web of power plays with Trump’s domestic and international agendas. The stage is set for a reshuffling of global dynamics with the tariffs as a tool for enforcing compliance with US economic interests.
As this theatrical trade spectacle continues to play out, it’s not only the obvious economic stakeholders that bear the brunt. The underlying strategy might be more about heralding a new order, where military might and economic influence converge, reminiscent of bygone imperial ambitions.
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