Description: Donald Trump’s 25% tariffs on steel and aluminum products towards Canada and Europe met stiff opposition as both Europe and Canada announced the imposition of counter tariffs on US products. Ursula von der Leyen, EU Commission’s President announced that the bloc would impose reciprocal tariffs amounting to $28 billion, on various US products such as steel, aluminum, textiles, home appliances and consumer goods. Canada backtracked their threats as Ontario Premier Doug Ford suspended the imposition of 25% charges on electricity exports to several US states. The UK and Australia are still moderately approaching the tariff trade question with Starmer and Albanese warning against the instigation of a global trade war which would damage global trade, supply chains and stock markets.
Impact: The tariff trade war intensifies as Trump’s nationalistic policies could severely affect the US economy and its strategic relations with key partners. So far, the Trump administration has crippled crucially important economic and geopolitical alliances with Canada, Mexico, Europe while the UK and Australia were still flirting with the idea of distancing themselves from the unilateral US foreign policies. The US as the global economic leader with the imposition of tariffs is effectively disrupting trade market flows, damaging the supply chain industry and incentivizing a trade war which could see key allies strategically repositioning towards unlikely markets and countries such as China. Trump’s focus towards revamping the US economy could considerably backfire as the US economy could suffer substantial price hikes and increased inflation all the while remaining without its main geostrategic partners.