US playing zero-sum game
The United States tariffs on steel and aluminum products from Europe, Mexico and Canada that came into effect on Friday, drew a heated response from Europe, Canada and Mexico and promises of retaliatory actions against US exports. Jean-Claude Juncker, president of the European Commission, said the European Union would move ahead with tariffs on US products, including motorcycles, denim, cigarettes, cranberry juice and peanut butter, that are expected to be in place by June 20 and will affect roughly $7.5 billion worth of US exports.
Canadian Prime Minister Justin Trudeau said the US tariffs are “totally unacceptable” and called them an “affront” to the security partnership between the United States and Canada. Chrystia Freeland, Canada’s Minister of Foreign Affairs, outlined Canada’s plan for dollar-for-dollar tariffs retaliation on US steel and aluminum products.
The Mexican government also said it will impose punitive tariffs on steel plate, lamps and lanterns, pig legs, sausage, apples, grapes and cheese products imported from the US, on a scale equivalent to the losses it suffers from the US tariffs.
The US’ huge trade deficit is a structural problem related not only to the current global value chain, but also to the status of the dollar as a leading global reserve currency. Its trade deficit is a result of its long-time offering of US dollars to other countries, and so cannot be resolved through the simple imposition of duties. Protectionism is a tactic that “kills 10,000 enemies but at the cost of 8,000 soldiers”. And this time the US is targeting its close allies the EU and Canada.
US President Donald Trump’s logic is: The US suffers from free trade with other countries, so he is trying to pressure them to open wider to the US through threatening punitive tariffs even against its allies. By doing so, Trump is attempting to send an unequivocal message to the world that if other countries do not make concessions as required, the US is ready to proceed with a trade war.
— BEIJING NEWS