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In less than two weeks, President Trump has upended global markets by imposing tariffs on imports from several of America's top trading partners.Here's the latest on where things stand with some of America's biggest trading partners:
The European Union
The European Union announced $28 billion in retaliatory measures on Wednesday, including levies on Kentucky bourbon, jeans and Harley-Davidson motorcycles. European Commission President Ursula von der Leyen said the EU was acting to "protect consumers and business" after the Trump administration's move to place a 25% tariff on imports of steel and aluminum. Starting April 1, the 27-nation bloc will reimpose $4.9 billion worth of tariffs that date back to Trump's first term. On April 13, an additional round of new tariffs will be placed on over $19 billion worth of U.S. goods, subject to approval of EU member states. Some tariffs in this round would specifically target products produced in Republican states.
The United Kingdom
Unlike the EU, the U.K. has taken what British Prime Minister Keir Starmer calls a more "pragmatic" approach, opting not to retaliate against Trump's steel and aluminum tariffs. "Obviously, like everybody else, I'm disappointed to see global tariffs in relation to steel and aluminium," Starmer told lawmakers Wednesday. We are, as [Trump] knows, negotiating an economic deal which covers and will include tariffs if we succeed. But we will keep all options on the table." The U.S. imports more than $450 million of steel from the U.K. annually.
Canada
Canada imposed new retaliatory tariffs against the U.S. on Wednesday, targeting $20.6 billion in U.S. imports. These measures, which took effect early Thursday, include a 25% tariff on $8.8 billion worth of U.S. steel products, $2 billion in aluminum products, and other goods such as sports equipment, cast iron and computers.
This marks the latest development in a dizzying tit-for-tat trade dispute between the two nations, sparked by Trump's 25% tariffs on most imports from Canada and Mexico, which took effect earlier this month. Earlier this week, Ontario Premier Doug Ford imposed 25% retaliatory tariffs on electricity exports to Minnesota, Michigan and New York, and warned that electricity could be cut off entirely if Trump escalated the trade conflict. In response, Trump proposed 50% tariffs on steel and aluminum, but reversed this decision 24 hours later.
Mexico
Mexico had initially planned to impose retaliatory tariffs in response to U.S. tariffs on steel and aluminum imports, but President Claudia Sheinbaum suspended these plans ahead of the April 2 deadline. The tariffs on all auto imports and goods compliant with the United States-Mexico-Canada Agreement were also postponed. Mexico had indicated it would place levies on U.S. goods, but has opted to hold off for now.
China
China has taken a measured approach to the trade conflict. While it has imposed countermeasures in response to the tariffs that have been introduced by the U.S. since President Trump took office, Beijing has generally responded more strategically. Following Trump's new tariffs on all U.S. steel and aluminum imports, China pledged to take "all necessary measures" to protect its interests. In addition to retaliatory tariffs, China has filed a formal complaint with the World Trade Organization.
India
India had been bracing for tariffs from the Trump administration — while also trying to stay ahead of them. But New Delhi is also concerned about the impact on its manufacturing competitiveness. Ahead of Prime Minister Narendra Modi's Feb. 13 meeting with Trump in Washington, India preemptively cut tariffs on several goods, including Harley-Davidson motorcycles, a move seen as a goodwill gesture. India's trade minister traveled to Washington last week to negotiate exemptions, but walked away empty-handed. Trump singled out India in his recent speech announcing "reciprocal tariffs," signaling that more trade friction could be ahead.
Brazil
Brazil's government has strongly condemned Trump's steel tariffs. As the third-largest exporter of steel to the U.S., Brazil argues the 25% levy ignores long standing economic ties between the two countries. Brazil has opted against immediate retaliation — for now. The Foreign Ministry says it will take steps to protect its steel industry and workers while continuing trade talks. The Brazil Steel Institute also pushed back, noting that under Trump's first term, the U.S. and Brazil had agreed to export caps, which Brazil has honored. The group also pointed out that the U.S. runs a multi-billion-dollar trade surplus with Brazil.
South Korea
South Korea's government declared an "emergency response mode" after the U.S. imposed 25% tariffs on all steel and aluminum imports. The move underscores the Trump administration's focus on reducing the U.S. trade deficit. South Korea, the fourth-largest exporter of steel to the U.S., has sought an exemption. Now, its trade ministry is advising corporations on possible countermeasures, including shifting production to the U.S. or diversifying export markets. In an effort to ease tensions, South Korea has pledged to reduce its trade surplus with the U.S. by increasing energy imports and expanding shipbuilding contracts for American buyers.
© 2015 Mutual Fund Observer. All rights reserved.
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