What’s the possible impact of new tariffs in world trade?

11/06/20180 CommentsLuis Gondelles
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On March 8th, United States’ president Donald Trump signed several presidential orders which imposed 25% and 10% tariffs on steel an aluminum imports to protect the American workers of these industries. Today, we see the impact of new tariffs in world trade. According to the president, the aluminum and steel industries have been ravaged by aggressive foreign trade practices, which means President Trump expected the impact of new tariffs in world trade to be favorable for the “ravaged” American industries. But the countries from which the United States imports the aluminum and the steel have expressed outrages at this decisions. According to experts, some new trade wars could be the impact of new tariffs in world trade. The actions carried out by President Trump prompted the affected world leaders to react accordingly: the EU issuing a 10-page list of tariffs on U.S. goods, Mexico imposing tariffs valued at $3 billion against US exports to its market, and Canada imposing its own on $12.8 billion worth of US goods. This is an obvious impact of new tariffs in world trade Countries raising tariffs in retaliation for another country raising tariffs, commonly known as a trade war. Import taxes affect world trade in a more broad way by inhibiting trade in the long run. This happens because if an American company finds itself in the need of steel or aluminum, it probably won´t look for it outside of the US’ borders. This why charging for bringing in goods could be seen as a hinder for international trade. That’s a major impact of new tariffs in world trade. Bottom line, the biggest impact of new tariffs in world trade is the reduction of production and international commerce. It could only help local producers, in these case the aluminum and steel industries for the US, “the bedrock of our defense-industrial base”, as President Trump called them. With information from: https://www.theguardian.com/us-news/2018/apr/30/trump-eu-tariffs-decision-postponed https://www.theguardian.com/us-news/2018/mar/08/donald-trump-metal-tariffs-trade-war https://www.theguardian.com/business/2018/may/31/us-fires-opening-salvo-in-trade-war-with-eu-canada-and-mexico https://www.theguardian.com/business/live/2018/may/31/market-rebound-italian-fears-ease-business-live https://www.bbc.com/news/business-44324565 http://money.cnn.com/2018/06/06/news/economy/mexico-us-tariffs-retaliation/index.html http://www.businessinsider.com/trump-canada-tariffs-list-states-that-would-lose-most-exports-2018-6

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