The trade war between the US and the EU is escalating due to new tariffs, affecting economic stability and threatening global investments.
Tightening Tariffs and Its Consequences
The atmosphere of mistrust between the US and Europe is intensifying. Donald Trump announced a 25% increase in tariffs on European steel and aluminum, leading to criticism from the American Chamber of Commerce in Europe (AmCham EU). The new measures could rapidly impact the US production chains as European steel and aluminum account for 20% of the imports. The main consequences include increased production costs, inflation on final product prices, and potential retaliatory tariffs from the EU.
Key consequences identified by AmCham EU include:
* Increase in production costs. * Impact on consumers through price inflation. * European economic retaliation. * Uncertainty for businesses and investments.
Threat of Export and Investment Crisis
The US is discussing the implementation of 25% tariffs not only on raw materials but also on automobile imports, semiconductors, and pharmaceutical products from the EU. This would heavily impact European exporters and US companies dependent on these supplies. AmCham EU warns of possible strong countermeasures from the EU, including increased tariffs on American liquefied natural gas, crude oil, and digital services. Such steps could cause an economic shock for states heavily reliant on trade with Europe.
Global Implications and Trade Future
The escalation of the trade war between the US and the EU could trigger global changes in economic flows. The extreme uncertainty regarding US trade policy is already slowing down transatlantic investments, potentially redirecting them to other regions. China and other emerging markets may capitalize on this tension, strengthening trade ties with Europe and weakening the US position in the global market.
The trade war between the US and the EU poses significant risks to both economies and global stability. Negotiations and compromises may mitigate the impact on the world economy.
