Hard conflict of trade: Trump threatens Europe with tariffs!

Hard conflict of trade: Trump threatens Europe with tariffs!

A surprise from Mexico: On Monday, the country reached a preliminary agreement with US President Donald Trump, which leads to the suspension of tariffs for one month. However, this development could only be the calm before the storm, because both China and Canada have already announced countermeasures. Economists warn of the impending escalation of a global trade war, which could significantly damage both the US economy and the battered Chinese economy, as vienna.at . Wolfgang Niedermark from the Federal Association of German Industry (BDI) is concerned: "Trump's customs policy is harmful to the growth prospects of the global economy."

The consequences for Europe

The European economy is likely to be the next goal of Trump. When asked about possible tariffs against the EU, Trump reacted with clear words: "Absolutely! The European Union treated us so terribly!" This could have devastating consequences for Germany, as the most important trading partner of the United States. The automotive sector, heavily dependent on exports to the USA, could be hit particularly hard. Companies such as VW, Audi and BMW that produce in Mexico would be directly affected because they export from there to the USA. There are already considerations to move production to the USA to advance to the tariffs, reports Tageschau.de .

economists estimate that the trade conflicts could also heavily burden the US economy. Trump's tariffs increase in a large part of US imports, which could increase consumer prices in the United States by around 0.6 percent by the end of the year. This could further tighten the loss of purchasing power for American households that suffer from inflation anyway. However, there is also hope for the EU: If the community is ready to import LNG and armaments from the USA, the pressure on Brussels could be alleviated. Chancellor Olaf Scholz makes it clear: "As a strong economic area, we can design and react our things."