Seyed Reza Mir-Taher, speaking to the website of the Strategic Council on Foreign Relations on the rise in US tariffs on European goods worth billions of dollars and analyses on the new trade war between the two sides, said: “Donald Trump, controversial US president since he came to power has been pursuing economic protectionism and, in the context of this policy, has imposed new tariffs on goods imported into the United States, particularly from countries such as China or EU member states.
He said that at present Trump is engaged in a very big trade war with China worth more than $550 billion. Last year, part of the trade dispute happened by increasing mutual trade tariffs, which eventually led to truce between the two sides after EU Commissioner Jean-Claude Juncker visited the White House and held talks with Trump.
“It seems like a new round of tariff war has been shaped between Europe and the United States,” he said. Wednesday’s WTO ruling in the long-running Airbus dispute — which found that Airbus received illegal subsidies under international trade law — has given the U.S. license to implement retaliatory tariffs against the EU.
The tariffs were originally set to be $11 billion, but were later reduced to $7.5 billion by the World Trade Organization. Naturally, the new tariffs, to take effect on 18 October have sparked outrage among Europeans, and they are seeking to impose reciprocal tariffs on the Boeing which is under strong backing of the US government.
“Naturally, this will lead to a trade war between Europe and the United States with unknown consequences. In the meantime, it is expected that with the escalation of the dispute between the two sides the European Union will try to find new business partners or expand relations with business partners, especially China.
“Increasing tariffs will cause the costs of imported goods to the US as well as exported items to Europe. This in turn will reduce employment across the Atlantic and rising unemployment and economic recession with its implications,” Mirtaher added. Of course, this will not stop there, and the effects of the trade war on the world economy in general will be manifested in the slowdown of global economic growth, decline in employment and reduction of international trade, as well as increased trade disputes and conflicts within the WTO.
Regarding the continuation of this trade war despite the decline in US economic growth indices and boycotting some European goods and Europe’s mutual threat to ban American goods, he explained: Naturally, given Trump’s policy and stubbornness as well as his top-down approach towards Europeans and regarding them as American vassals, he is expected to continue the current path which will naturally increase the tensions and disputes between the two sides. This has led European countries, especially officials in these countries, particularly Germany and France, as the first and second EU states to call for a reciprocal approach towards the United States.
Mr. Le Maire, the French finance and economy minister, has even considered imposing sanctions against the United States, and the combination of these issues will naturally make trade disputes between the two sides more complex, especially if Trump puts into effect his threat to significantly raise car import and parts tariffs from Europe to the United States it would be like a bomb that would completely change the bilateral trade relations.
He added: “From Trump’s point of view, as long as the trade war is widespread and in his view he is able to score points from the US trading partners, especially China and Europe, it will be to his advantage in the 2020 presidential election.”
Mirtaher said: “Trump’s highest reliance in winning Americans’ votes is by improving the economy, boosting employment and increasing industrial activity within the United States, and he thinks he can impose new tariffs on goods imported from Europe if he can. This will raise the federal government’s revenues, will create more job opportunities within the United States, ending Trump’s claim that China and Europe have been exploiting the US for years and used its services for free. Naturally, under such circumstances Trump is expected not only to reduce the intensity of his current approach but continue to do so in the future.