Trade Commissioner: EU "Stands Up for Open Global Trade" by Hiking Tariffs
The New York Times reports Europe Strikes Back Against Trump Tariffs as Global Trade War Escalates.
The European Union fought back on Friday against the Trump administration’s tariffs, slapping penalties on an array of American products that target the president’s political base, like bourbon, motorcycles and orange juice.
“You look at the European Union,” the president told a crowd in Duluth, Minn., on Thursday. “They put up barriers so that we can’t sell our farm products in. And yet they sell Mercedes and BMW, and the cars come in by the millions. And we hardly tax them at all.”
But in a trade war no sides are left unscathed. Although Mr. Trump has sought to exert pressure on other countries, the global nature of supply chains means the tit-for-tat tariffs are ricocheting in unexpected ways and may ultimately cost jobs in the United States.
Cecilia Malmstrom, the European commissioner for trade said “We did everything we could to avoid this situation, but now we have no choice but to respond. The E.U. has a responsibility to stand up for open global trade.”
“For the first time we’re hearing about decisions to postpone investment, postpone hiring, postpone making decisions,” Jerome H. Powell, the chairman of the Federal Reserve, said during a panel discussion with other central bankers in Sintra, Portugal, on Wednesday. “That’s a new thing.”
- Sales of Mercedes S.U.V.s, made in Alabama by the German automaker Daimler, could be hit by the American trade dispute with China.
- The Swedish manufacturer Volvo faces rising prices on the imported steel it uses at its Mack Truck factory outside Allentown, Pa.
- Take the Mack Truck factory in Pennsylvania. Mack may be a quintessential American brand, but it’s owned by Volvo Group, which is based in this seaport on Sweden’s southwestern coast. The Mack plant uses specially treated steel imported from Europe. American substitutes are not readily available, if at all.
- ABB, a supplier of heavy electrical equipment, is based in Zurich. ABB makes electrical transformers in South Boston, Va., and Crystal Springs, Miss. “We use a very specific kind of steel,” said Ulrich Spiesshofer, the chief executive of ABB. “The capacity and the number of players for that kind of steel is very limited. The steel that we import from other places is being punished.”
- Daimler, the maker of Mercedes cars, has already been caught in the crossfire between the United States and China. The company issued a profit warning on Wednesday, in part blaming tit-for-tat tariffs for a slump in the sales of S.U.V.s, which are built in Tuscaloosa, Ala.
Yes Indeed. Let's stand up for open global trade by raising tariffs. This makes perfect sense in some alternate universe, but not here.
- A Fed study shows "Tariffs Kill High-Paying American Manufacturing Jobs and Businesses".
- Auto job losses alone are likely to hit 45,000 as noted in Pandora's Box: Another Look at Steel Tariffs.
- On June 8, I noted Three US Tire-Chord Makers Threaten to Close Doors Due to Trump Tariffs.
Trump believes China will lose more. This we call "winning".
Meanwhile, the Fed cites postponed investment, postponed hiring, and postponed making decisions.
What can possibly go wrong when you are winning big?
MIke "Mish" Shedlock