Tariff war threat is real

Trump’s promise to slap levies on certain goods is bad for trade. Credit: Michael Vadon Trump’s promise to slap levies on certain goods is bad for trade. Credit: Michael Vadon
Industry Database

COMMENT: It seems that a sense of madness has descended on the Trump administration and, in response, Europe is joining the madness, writes Ben Hackett.

The announcement of a 25% tariff on steel imports and a 10% tariff on aluminium by President Donald Trump, as a means to protect the US economy, cannot be described in any other way.

The countries that will be impacted the most are close strategic partners of the US, and they have reacted in a knee-jerk manner. The president of the European Commission, Jean-Claude Juncker, retaliated with threats to impose tariffs on Levi’s and bourbon whiskey; never mind that most Levi’s originate in Asia.

The imposition of tariffs to support uncompetitive industries in the US will hardly solve the problem and will potentially reduce employment as other industries relying on both metals will have a higher input cost. The end result will be that the consumer is the one that suffers the most from higher prices.

To add fuel to the fire, the US Federal Reserve has hinted that there will be four interest rate hikes in the coming nine months of the year - this has resulted in the US dollar gaining strength, which in turn will harm exports.

With what looks like the beginning of a trade war centred around the US, as the world’s major trading countries, China, Korea, Japan and the EU begin to respond to the proposed Trump tariffs, we can expect global trade to slow and possibly not reach the healthy levels projected for this year.

The reason for the Trump tariff announcement may be related with his decision to run for another term and in making certain that his base continues to follow him as he enacts some of his promises from the previous campaign. But his lack of national strategic policy is a clear and present danger to global trade.

The real threat in all of this is that it will be hard to stop a tariff war once it begins. Trump’s pledge to impose tariffs on EU-produced cars in retaliation for tariffs on Levi’s could be just the beginning. What next, a massive tariff on US aircraft components?


Jade Logistics leads Indonesian ports into a digital future

Christchurch, 06 July 2018 – PT Pelabuhan Indonesia I (Pelindo I) has chosen the terminal operating ... Read more

Gantrex has recently announced the launch of a whole new product category to its portfolio, the TrenchLok™ Cable Trench Cover.

Gantrex’ TrenchLok™ cable trench cover, efficiently and economically protects cranes’ power cables f... Read more

TGI Maritime Software launches «Hazardous» and «Yard Management» modules

TGI Maritime Software launches two complementary modules allowing yard optimization and hazardous co... Read more

Asia’s future energy needs on the agenda at Tank Storage Asia 2018:

Asia’s future energy needs on the agenda at Tank Storage Asia 2018: Read more

Portunus assumes dealership of Dana Spicer in Egypt

Portunus Naem, the Egyptian branch of Portunus Port Spares & services is appointed as official Dana ... Read more

Very first installations by new SFT Spanish office

Our new office in Spain is not even a year old and we already celebrate two successfully completed i... Read more

View all