After Trump imposed 25% tariffs on steel and aluminum exports from the EU to the US amounting to some $28 billion, the former retaliated with tariffs of comparable size, at roughly €26 billion. They haven't decided on the full list of products that will have more tariffs added, but they said they are open to negotiation and would rather drop them altogether than engage in a trade war.
The same kind of action-reaction happened in Trump's first term, but with lower amounts being thrown around, twice, in 2018 and in 2020.
It is worth mentioning that Trump's tariffs were imposed on raw materials, not on products with high added value, but raw materials that the US companies could probably get from elsewhere at a comparative or lower price, after the 25% tariffs is imposed on EU exporters, probably mainly ArcelorMittal (based in Luxembourg, but a global player), which is ranked 2nd in the world in the steel production after a Chinese company.
The EU is very big on recycling, so they might have significant amounts of aluminum and steel from that source. I just learned from Grok that 30% from the aluminum and steel in circulation in the world comes from recycling, not from primary ores that are processed.
That's a damn good image the AI created on trade war between countries!
On the trade war topic, I missed the retaliation of tariffs from China after the US increased their tariffs on Chinese exports to 20%. But after looking into it, it seems they raised their tariffs against US exports to 15%, mainly "agricultural products such as chicken, wheat, corn, cotton, soybeans, pork, beef, and dairy products". They just came in effect on March 10th, by the way, about a month after the US increased their tariffs.
Tariffs as a Way to Force Fed to Cut Rates?
From what I read, Trump wants Fed to cut rates and Powell doesn't want to (or not as quickly). I've heard the theory that Trump uses tariffs as a way to force Fed to cut rates.
The theory says that if the economy slows down (which would be an effect of a trade war), Fed would be forced to cut rates, to speed it up again, by allowing access to cheaper credit. If that happens, it would be a positive outcome for risk-on assets, which include crypto.
However, Trump seems a too bigger fan of tariffs to be his own objective. I can see a couple of other targets he could follow, but he might destroy the global (and American) economy in the process. Who really knows? These are complicated mechanisms to gamble with...
Anyway, on using tariffs as means to force Fed to lower rates, maybe, but he was a fan of them in his first term too, when the Fed rate was pretty low and only started to go up in the second part of his term.
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Honestly man, trade wars always look like a giant game of who blinks first, but instead of blinking, they just keep slapping tariffs on each other. The regular people and businesses always get caught in the crossfire while politicians play chess with the economy and human lives. Also, Trump possibly using tariffs to push the Fed is like attempting to crash your own car just to get a free tow
I agree, this does seem like a justification found post-factum to appease the markets.
Now he says he is using them to try to force the FED to cut rates, but that wasn't what he was saying a week ago. As unpopular as his tariffs are even among the MAGAs, he seems to be trying out any justification he can think of. But who knows. As usual with Trump, what he says will change from day to day. Wait for the wind to blow and he'll say something different.
It is possible that in some (many?) cases he acts first and everyone tries to find justifications for his actions later. But the tariffs thing was a constant for him, the blow back is much harder than he probably imagined - that's what happens when the global economy is highly interconnected.
China and Europe to make agreements during this war? This tariff wars is becoming quite heavy
I think China would like that. Trade between China and Europe is quite high already, despite EU having its own set of tariffs against certain imports from China.
30% of aluminium and steel from recycling? How were they able to actually do that?
Well 70% is still good high enough coming from the mines. I just think some places takes the art of recycling more serious..
I don't know. Some countries in Europe are really focused on recycling. And probably it's easier to recycle (and less polluting? - I haven't looked into this) than to process primary ores.
Recycling is easier, I guess it's even going to be beneficial going forward. There are far too many wastes that can be reused
The collection part is one thing. I don't know if there is another filter besides the collection centers, and then they also need to be processed into the raw material (melted in the case of steel or aluminum).
I don't think the tariffs are great for either party, but Trump likes them. It's slowly turning into a tariff war with every single country around the world. I wonder if this will cause the markets to crash as prices go up for everyone.
That's what will likely happen because there will be supply chain disruptions and price increases due to that and due to tariffs being passed on to consumers.
Trump is a con artist and loves money. He said he loves tariffs more than God. Why? Because stealing provides him and other crooks easy money.
Tariffs is a quick way to get some positive cash flow and firing a bunch of people is a quick way to reduce negative cash flows.
Its a method to cheat the system and make it look like you have a productive economy but it will not last since he is actually raping the system of real value.
He and his cronies are destroying trust between nations. He is most disrespectful and thinks he doesn't need anything from Canada. At some point there will be more riots in the streets and eventually the people will have him removed from office. But not until the people feel more pain. USA, currently is not a good example of a democracy but I am sure many think they are the best and the guiding light for all democracies in the world.
Hard to believe a country would know so little about their closest neighbour and have no qualm about going to war to steal their resources. And to blame Canada for a bad trade deal when he was the #TooFuckeh one that negotiated the deal the last time he was President.
Trump breeds stupidity. Sooner or later the wise folks in the country will find a way to remove what seems to be unlimited power. Unfortunately many people will suffer and die before he and his greedy cronies are voted out of government.
Seeing your comment we can understand the kind of revolt his tariffs created in Canada. I saw something about that, but it's another thing to read it from someone you know...
I don't think this is easy money. Because after this "easy money" comes a big slow down in economy plus the effects on consumers, which will likely have worse effects than the money collected through tariffs. I doubt they don't see that, which makes me think they are doing it on purpose, for whatever reason, despite the HUGE issues they are causing both inside the US and globally.
It might be that Trump has this fixed idea and nobody has the guts near him to contradict him, or those who do he doesn't trust, or worse, he considers enemies or belittles them. We have seen this before in history...
Your not Trump. !LOLZ
He has a mission and that is to con the followers. If he can get some early cash flows that make the economy look better, lower inflation, maybe even pay out a dividend, etc he will and is doing it. He and his cronies will do what it takes so you don't notice reality which is a looming recession.
Let us not forget that in Trump's first term, he added over 7 trillion to the debt. Now he and the riches person on the planet is going to steal from the people and say they reduced the debt while gifting themselves some lucrative deals to continue to grow their own wealth for generations.
France did publicly and so has Canada. More will come along as they see him insult those wo do contradict him.
Here in Canada, a leader like Trump would never win a democratic election. In USA it is possible because of many funders and special interest groups influencing election results. It is easy to see for me but I am well aware of the distraction techniques used by people hiding the truth.
USA Democracy is #TooFuckeh and it is hurting everyone in the world. The other day he felt the need to make a public declaration that USA is English only. Why? The worst is yet to come so plan accordingly. Everyone in the world is vulnerable when large economies are tied to an overly inflated currency.
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I know. But he doesn't trust them.
I think it has to do with immigration and his stance on it.
Musk got some real push-back on Tesla, X, etc. So, if he keeps going, he might end up in a rough shape with his businesses, while he might or might not get his missions to Mars during Trump administration, as he wants (likely not).
Changing this status quo won't be easy, and thinking about alternatives, there's none that is desirable in the short term. Long term, who knows?