The President's Customs Boomerang
US President Donald Trump has once again "shaken the world". He has imposed tariffs on virtually all goods imported into the US, affecting more than 150 countries around the world. In the case of the European Union, it is 20 percent and China even 34 percent. According to Trump, yesterday was America's "Liberation Day". It looks more like a trade war of global proportions.
Three main conclusions can be drawn from expert analyses of the motives of the White House's customs strategy. He considers tariffs to be a tool that is intended to correct the imbalance in global trade that is disadvantageous to the US. At the same time, they are intended to serve to obtain new sources of revenue, as the new presidential administration is radically overhauling the functioning of the federal government. And also to motivate foreign companies to relocate their production to the US, in order to create thousands of new well-paid jobs.
Austrian political scientist Ralf Schöllhammer said that tariffs are not only a clear sign of protectionism, but also a trap to attract foreign industry to the US. "European companies may soon find that less bureaucracy and cheaper energy are irresistible. Why shouldn't titans like Volkswagen, which produces electric cars, relocate to America to gain a competitive advantage?"
Can this strategy work? It is not certain. Above all, the economic and political war against the EU carries the risk of unraveling a major global trading partnership with serious economic and security implications. The retaliatory measures that Brussels is already considering could also have a negative impact on Americans and American manufacturers.
A public opinion poll in France showed that a majority of the public would support a boycott of American goods in response to Washington's "tariff bullying". It is also important to note that trust in the US as an ally is rapidly declining. In Germany, only sixteen percent of Germans trust the United States.
Canada is also moving closer to Europe. New Canadian Prime Minister Mark Carney declared that his country's "entangled" relationship with the United States is over, and has therefore chosen London and Paris as the destinations of his first foreign trips.
The sharpening of transatlantic economic differences may also strengthen China. Europeans may not want to follow a tougher American policy towards Beijing now, when closer cooperation with it could counterbalance economic troubles with the United States.
A look at Asia shows that Trump's tariff war against South Korea and Japan has already led these two long-time American allies to establish a strategic economic dialogue with China last weekend.
It is therefore not surprising that Michael Froman, president of the American Council on Foreign Relations and former top trade official in the Obama administration, stated in Foreign Affairs magazine that the Trump era is accelerating a world order that is being shaped more in the image of China.
Miloš Balabán, Právo Daily