Trump Plans New Tariffs, Sparking Global Trade Worries
(Based on reporting by Reuters)
U.S. President Donald Trump is preparing to introduce new tariffs (taxes on imports) that match the fees other countries charge on American goods. This move is raising fears of a bigger global trade war and could make prices rise even more in the U.S.
Trump’s trade team has been working on these plans, and his economic adviser, Kevin Hassett, told reporters at the White House that talks with other countries started early Wednesday. Hassett hinted that Trump might announce progress or share his ideas soon.
On Monday, Trump said he would announce these matching tariffs within two days. He also mentioned possible new taxes on cars, semiconductors, and medicines. Meanwhile, the European Union (EU) is preparing its response. The EU’s leader, Ursula von der Leyen, warned that any tariffs against Europe “will not go unanswered.” Germany suggested the EU should try to negotiate to avoid a trade war but also be ready to fight back.
Earlier this week, Trump shocked markets by announcing tariffs on all steel and aluminum imports starting March 12. Countries like Mexico, Canada, and the EU criticized the move, while Japan and Australia asked to be exempt. Companies that rely on steel and aluminum are now scrambling to deal with higher costs.
Last week, Trump added a 10% tariff on Chinese goods, and China responded with its own tariffs. He also delayed tariffs on Mexican and Canadian goods for a month to allow more talks.
While some U.S. workers support the tariffs, many businesses are worried. Companies like Ahold Delhaize and Siemens Energy warned that tariffs could lead to higher prices for consumers. European steelmakers fear cheap steel might flood their markets if the U.S. blocks imports.
Australia, however, remains confident. Its industry minister said the country’s plan to export more “green” aluminum won’t be affected by U.S. tariffs. He questioned whether Americans would want to pay more for a product they need.
Economists say tariffs could push inflation (rising prices) even higher. Recent data showed U.S. inflation rose in January, with big jumps in the cost of gas, housing, and even eggs. Some experts wonder if this will make Trump rethink his tariff plans.
Trump’s trade adviser, Peter Navarro, argued that tariffs during Trump’s first term didn’t cause inflation to soar. He said other countries might lower their prices to keep selling to the U.S.
However, trade experts say creating these matching tariffs is a huge challenge. William Reinsch, a trade expert, explained that matching every country’s tariffs would be complicated and could hurt U.S. consumers. For example, if Colombia taxes coffee heavily to protect its farmers, the U.S. would have to do the same—even though Americans don’t grow coffee.
In short, Trump’s tariff plans are causing global tension, and the effects could ripple through the economy, affecting everything from car prices to your morning coffee.
(This summary is based on original reporting by Reuters.)