Trumps Trade War with the European Union
All European nations have been on extremely good terms with America since the end of World War 2. One of the reasons behind these good terms was the fact that Americans and Europeans shared the same belief system, one that claims that international trade is a virtue. The belief explains that countries are better off economically when they trade with each other. An individual country with fewer allies is an isolated nation with no influence over the rest of the world.
However, Donald Trump, the latest American President does not seem to agree to this. Firstly, Trump has a medieval view of the way trade functions. He believes that if America runs trade deficits with other nations, they are losing money. Secondly, he wants to bully other nations to buy more American products instead of becoming more competitive in terms of prices and quality.
As a result, he has attacked many foreign nations and has threatened to impose trade tariffs on them. His fight with China and the resultant tariffs on steel and aluminium are well known.
The problem is that Trump has gone too far. He has now started attacking Americas oldest and staunchest allies, i.e. the European Union. In this article, we will have a closer look at the feud between Americans and Europeans.
Trumps Logic for Import Tariffs
Trump believes that Americans are buying too many European products. Also, he has commissioned some sort of study on this subject. The result of this study claims that the decline of the American automobile industry is a national security threat to America. Trump believes that cars sold by European companies are the reasons why Americans dont buy homemade cars. Hence, he wants to impose tariffs on European cars to make them more expensive and urge consumers to buy locally made vehicles.
This decision has left the European leaders including Germanys Angela Merkel aghast. She is unable to believe Trumps logic given the fact that most Republicans claim to support international trade. Also, she has repeatedly pointed out that companies like Bavarian Motor Works (BMW) have built their factories within the United States. BMWs South Carolina plant employs thousands of local people, makes over half a million vehicles each year, many of which are exported from America to other nations. Hence, even though BMW may appear like a German brand to people, a lot of its production is done using American means of production.
The German car industry has massive sales within the United States. The top three carmakers, i.e. BMW, Mercedes Benz, and Daimler sell close to 50% of all the cars which are sold within the United States. Hence, it is obvious that Trump known Europeans will do anything to avert these tariffs which is why he keeps threatening them.
This is not the first time Trump has threatened to impose these tariffs on other European nations. The last time he made this threat, the European Union negotiated in good faith. They had agreed to buy more American products and were doing so. However, now all of a sudden, Donald Trump has once again started this unprovoked aggression aimed at European governments.
Effects of Donald Trumps Import Tariffs
The bottom line is that the escalation of the conflict is not in the interest of either parties. Hence, it is obvious that sooner or later sanity will prevail and no tariffs will be levied. However, before that, a lot of noise is likely to be made. Trump will try to score as many political points as possible given the fact that the extended shutdown and the national emergency have both made him extremely unpopular.
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