Recently, Donald Trump, the former President of the United States, has been promoting these tariffs. He is responding to growing calls from European leaders. Angela Merkel, the German Chancellor, has lobbied directly and explicitly for Trump to go to “zero” tariffs. She proposed that the first step should be to reduce existing levies so trade relations start moving more efficiently.
In recent months, at least, the United States-China trade war has started to thaw. As part of this shift, Trump’s administration drastically reduced the number of tariffs, from around 60 percent to only 30 percent. In retaliation, China slashed its tariffs to 10 percent. This reversal is a welcome sign of further de-escalation of the US-China trade conflict that has rattled markets and economies worldwide.
The picture is not so rosy. The European Commission is still moving forward with plans to impose retaliatory tariffs on U.S. goods. We already know potential tariffs could hit up to €100 billion of American products. That is, unless negotiations with the Trump administration lead to something better. The Commission’s decision coincides with widespread concern over inequitable trade practices and lack of market access.
The European Commission has given itself just 90 days to reach a permanent agreement on tariffs with the Trump administration. This striking timeline underscores the urgent need for a common vision. Both negotiators seem to recognize that failing to resolve existing trade disputes may invite dire economic retribution.
Trump’s role in these talks underscores his lasting influence in global economic affairs, even outside of office. Yet his administration’s past tariff policies have had a dramatic, long-lasting impact on international trade dynamics. Stakeholders will be paying attention to see how his new team will turn this page.
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