World hits back at Trump in trade fight
Economists worry an all-out trade war is going to be inevitable
WASHINGTON — The United States attacked first, imposing tariffs on steel and aluminum from around the globe and threatening to hit tens of billions of dollars in Chinese products.
Now, the world is punching back.
The European Union is set Friday to slap tariffs on $3.4 billion in American products, from whiskey and motorcycles to peanuts and cranberries. India and Turkey have already targeted U.S. products, ranging from rice to autos to sunscreen.
And the highest-stakes fight still looms: In two weeks, the United States is to start taxing
$34 billion in Chinese goods. Beijing has vowed to immediately retaliate with its own tariffs on U.S. soybeans and other farm products in a direct shot at President Donald Trump’s supporters in America’s heartland.
The tit-for-tat conflict between the United States and China — the world’s two largest economies — is poised to escalate from there. The rhetoric is already intensifying.
“We oppose the act of extreme pressure and blackmail by swinging the big stick of trade protectionism,” a spokesperson for China’s Commerce Ministry said Thursday. “The U.S. is abusing the tariff methods and starting trade wars all around the world.”
Cecilia Malmstrom, the E.U.’s trade commissioner, acknowledged that the E.U. had targeted some iconic American imports for tariffs, like Harley-Davidson motorcycles and bourbon, to “make noise” and put pressure on U.S. leaders.
John Murphy, a senior vicepresident at the U.S. Chamber of Commerce, estimates that $75 billion in U.S. products will be subject to new foreign tariffs by the end of the first week of July.
“We’ve never seen anything like this,” said Mary Lovely, a Syracuse University economist who studies international trade — at least not since countries tried to wall themselves off from foreign competition during the Great Depression.
Those personally in the line of fire are among the most concerned.
“It will be a disaster,” said Nagesh Balusu, manager of the Salt Whisky Bar and Dining Room in London, who expects the European Union’s tariffs to add more than $7 to the price of a bottle of Jack Daniel’s, which is imported from Tennessee. “It’s going to hit customers, that’s for sure. How they’ll take it, we’ll have to wait and see.”
As painful as the brewing trade war could prove, many have seen it coming.
Trump ran for the presidency on a vow to topple seven decades of American policy that had favoured ever-freer trade among nations.
Trump charged that a succession of poorly negotiated accords — including the North American Free Trade Agreement and the pact that admitted China into the World Trade Organization — put American manufacturers at an unfair disadvantage and destroyed millions of U.S. factory jobs.