Since the announcement of the new US tariffs on steel and aluminium, which applies to many of its biggest trading partners, there have been calls from around the world for President Trump to retract the decision. Already, three of America’s main trade partners, Mexico, Canada and the European Union have confirmed that they may have no choice but to impose counter tariffs to protect their interests. But, with more and more countries taking similar measures, what effect would this have going forward?
China, who have also had tariff increased put on their goods, have accused the US of “firing the first shot” in what could become a global trade war. The White House said that new tariffs of 25% would be put on Chinese good wroth an estimated $50 billion. Like other countries, the Chinese government have responded by saying that it will have to implement counter tariffs. These would be worth around $34 billion, and would include products like cars and agricultural products.
India have also proposed additional tariffs on thirty US products to make up for the hike on their products, which is thought to be worth around $241 million. According to a statement sent to the WTO, they say that their tariffs would be equal in value to the US tariffs on steel and aluminium, and they would include a range of products including apples, walnuts, almonds and some metal and chemical products.
The total value of US goods and services sold to India is an estimated $42 billion. “India reserves the right to adjust the specific products for which [tariffs would apply], and its right to adjust the additional rate of duty imposed on such products,” the WTO statement said.
President Trump argued that the tariffs are intended to help American companies. But, there are concerns that not only could they actually be damaging for American businesses, they could trigger a new trade war that would have serious implications for the global economy.
With deals currently in limbo, companies across the US say that supplies they need could jump in price, as their ability to do business with other nations, and in particular China, will become more difficult. In the end, a trade war like this would hurt not only companies, but the global economy and ultimately consumers would be significantly worse off.