The European Union and the U.S. are likely to get into another trade and tax war after President Donald Trump's latest action, where he has signaled that more tariffs may be brought in against the EU. While Trump has imposed significant tariffs on countries like Canada, Mexico, and China, the EU has hinted that it may retaliate if these new tariffs are actually brought in. Although Trump hopes that trade talks will avert this conflict, he has already raised his voice against the EU. Earlier, in his first term, Trump had imposed tariffs on the imports of steel and aluminum from Europe that led to a trade tussle. The EU retaliated by raising tariffs on various U.S. products, including motorcycles. More recently, the threat had been issued in December that if the EU does not buy more American energy and gas, the trade war will only intensify.
The threats did not stop here:.
His controversial statements on the purchase of Greenland, a part of Denmark, also sent ripples around the world. Last week, U.S. Secretary of State Mike Pompeo confirmed that Trump's interest in Greenland was genuine, but the Danish Prime Minister dismissed the idea, saying that Greenland was not for sale. It is a topic of geopolitical interests to Trump concerning the island; however, the same has become an issue after he returned to power. The European Union has condemned the U.S. tariff policy, especially the step to impose tariffs on European goods. According to the European Commission spokesperson, this creates unnecessary economic barriers, boosts inflation, and undermines the competitiveness of EU products. Europe made it clear that they would fight back very aggressively against unjust or unilateral tariffs. In reaction, both Canada and China have now joined the fray.
Canada, for instance, has proposed to increase duties on US-produced goods, including wine, beer, and a host of farm products, including fruits and vegetables.
British Columbia, Canada: Provincial officials stated that if the trade war deepens, they will also prohibit the sale of US-brewed and -distilled spirits. The government of Canada asked its economic experts to determine which retaliatory steps would be most effective. Mexico has also been preparing to take retaliatory steps, warning that it would not give up. China has also warned that such trade wars will not help anyone. It is indicated by Chinese officials, including Foreign Minister Wang Yi, that it will take necessary actions to protect its interests so that the impact of any new tariffs will not affect the economy of the country. Such actions have a ripple effect around the globe as countries align to safeguard their interest. Meanwhile, in a completely different context, Trump recently commented on South Africa. After accusing the South African government of land expropriation without compensation, Trump announced that the U.S. would reconsider its future economic assistance to the country. He stated that once an investigation was conducted, the U.S. would revise its foreign aid policies to ensure that no special privileges were granted to specific groups in South Africa. With ongoing trade disputes, retaliatory tariffs, and global economic shifts, the world watches closely as these tensions unfold.