Trump's Tariffs as a Political and Economic Threat

 Trump’s protectionist policy, the cornerstone of his electoral program, is taking shape, for now only with announcements and proclamations. After the duties against China last week, the new threat, which has also been announced, is to impose 25% tariffs on incoming goods consisting of steel and aluminum, without any exceptions or exemptions. For Europe, it is a question of seeing whether the existing duties, precisely 25%, will only be confirmed or will even reach 50%. The declared aim is to increase American wealth. In addition to Europe, the main targets are Canada and Mexico: the duties towards these two countries are in clear violation of the free trade agreement between the three states. This violation represents a very bad signal of the direction of the policy of the new US administration, in relation to the approach with existing international treaties. For Canada, the duties will weigh heavily on a sector that earns 11.2 billion dollars from the supply of steel to the USA; However, the prediction is that this measure will backfire on US manufacturers, from the automotive industry to producers of carbonated beverage containers. On the contrary, the White House predicts a favorable trade balance, thanks to the greater benefits that the duties will bring to local steel and aluminum industries, compared to the losses of other industrial sectors. In Washington's vision, heavy industry is considered strategic to stimulate other sectors as well, acting as a driving force for the US economy. Trump has declared that the duties will affect a rather wide range of products, a factor that could trigger a trade war, with unpredictable consequences at a global level. With regard to Mexico, however, the tariff measure has been suspended for a month, in exchange for greater border controls to prevent migrants from entering the US. This suspension could mean that the duty measures could be a threat to obtain something else, for example for Europe greater military spending and greater commitment and involvement in operations, such as to allow a different deployment of US troops on the world stage. Even for Canada, the threat has been suspended with the commitment to stop migrant trafficking and the export of fentanyl-based drugs to the USA. The commitment requested from Canada seems mild, perhaps because Ottawa had drawn up a list of products to hit with customs duties, mainly from Republican states, which supported Trump the most. In any case, hitting Mexico hard, which has replaced China as the main supplier of the USA, with goods for 505.851 billion dollars and with a trade imbalance, in favor of Mexico City, of 171.189 billion dollars, will represent an intrinsic problem for the American manufacturing industry, presumably struggling with increases in supply costs. The trade war with Beijing has already started and both countries have already applied duties respectively. Even more interesting will be the evolution of relations with Europe, publicly called out by the vice president for the excessive trade constraints present on its territory, which do not facilitate easy reciprocal relations. Implementing a trade policy that is too rigid on the richest area in the world can have seriously harmful effects for US industry, especially since Brussels is looking for concrete alternative outlets for its products, thinking about new trade agreements with China; if we were to go in this direction, after Biden's policy had managed to reverse the trend, the effects of the duties would have the double negative consequence of losing market shares of American products in Europe and that these shares could be replaced by Chinese products; and the extemporaneous declarations of the new American president, about the creation of a riviera in Gaza, but without Palestinians, and of a Ukraine that will once again be Russian, do not help the dialogue with the Europeans, allergic to certain attitudes, despite the growing presence of Trump's supporters, even in the governments of some countries. If the military issue can be a lever that Trump will not hesitate to use, the White House must take into account that these provocations could push Brussels to slowly but progressively detach itself from its American ally.