The trade war began, and Europe is aimed at “Republicans” products

But when the silence from Washington was interpreted as a green light for 25% on the global steel and aluminum – including on the EU – the message came out of Brussels. As was the previous round in 2018, the Union announced that he would impose mutual protective lids on American goods, with an emphasis on the produce of Republican countries: peanut butter and agricultural produce, Harley Davidson and Jeans motorcycles. And so, after a lot of talk and threats, Wednesday was the first day of the EU and the United States, which manages the most significant trade relations in the world.

There are many more open fronts between the parties, but the dynamics seem to become clear. Trump threatens the lids, sending the EU (“founded to knock us”), requires a security expense rate that even the US does not stand and threatens to dismantle NATO. And in Europe, unlike other countries, not looking for a public confrontation. Don’t count the reactions, do not take mutual steps before it turns out what reality is and what a presentation is for television.

In the present case, even in European Commission, they have bothered to explain to European media in recent days that the impact of aluminum and steel tariffs is not significant. Unlike Canada and Mexico, the EU is not a significant exporter of these metals to the United States. The World Economy Research Institute in Kil calculated that the lids who came into force would harm the EU’s annual GDP by only 0.02%. “Their effect is limited because the relevant goods account for only 5% of the EU’s overall export, and only a minority reaches the US market,” it said.

On the other hand, if you take into account the impact of the lids that also include Canada and Mexico, the main source countries for both metals, the new protective assets are expected to bring 0.41% to the American consumer, due to the fact that they “increase the output of many American industries.”

What happened in 2018?

The announcement by the European Commission, as expected, also hinted that those who had to pay the price for the steps would be American importers, and indirectly the American consumer. U.S. recession talk in the US has swept markets in recent days. According to European Commission, the new American tariffs will be relevant to 26 billion euro exports a year, “so the American importers will have to pay six billion more euros,” it said.

This is also the amount that Europe intends to collect as a response, in two waves. Initially, April 1 will be launched on boats, motorcycles, whiskey and backbone, peanut butter and jeans, worth eight billion euros. If the situation does not change, the Union indicates that another wave of € 18 billion, which includes agricultural produce, chicken and beef and industrial merchandise. This phase will begin on April 13, if not negotiated. “The EU must protect his consumers and businesses,” the president of Commissioner Ursula von Der Line harast the response.

There are many in the union who remember how the trade war faded last time, after the successful visit of the then European Commission, Jean-Klaud Yunker, in the White House in the summer of 2018. And the desire for friendly policy on the part of Europe overcame the combative rhetoric. Trump agreed. Freedrich March, which is expected to be Germany’s next Chancellor, said the union to go exactly in that direction. If von Der Lane is “burnt” in the White House for various reasons, including Mizogenia, the role may be imposed on it.

The euro is actually strengthened

And in Brussels, in the meantime, encouraging the situation in the markets. Contrary to the situation after Trump’s previous tariff messages, which sent the euro close to equality against the dollar, in recent weeks the European currency is growing. While this is mainly due to the lowering of interest rates in the Eurozone and the tremendous rescue plans for the military industries that Europe is currently formulating, the euro is already approaching $ 1.1, and does not so far demonstrate special sensitivity to the customs. The leading stock indices on the continent also recorded ups, despite the announcements.

Von Der Lane, meanwhile, said the implications of the current and future rates would be difficult. Trump has already threatened 25% on vehicles, which can further harm the European automotive industry, which are currently publishing reports that show collapse in profits by 30% and even more. On April 2, a much more comprehensive cover mechanism is supposed to enter into action, which “compares” protector from where the US is lower than that raised by the exporting state. The union will also have to respond. In accordance with the policy, it is “hand -to -use” with the US.

The person who took on the responsibility to threaten a little more is France. The EU Minister Banjamin Haddad said the union could “escalate” his response to the new tariffs from Trump. “If this is the case, that we will have to increase protective lids, then digital services or intellectual property can be included in the customs,” threatened.

And in the United Kingdom, in which they hoped until the last minute to be exceeded from the grubby, which was trusted by “national security” considerations, they expressed disappointment that he entered the validity, and that he would harm the British steel industry. We will take a “pragmatic approach,” a minister in the Treasury, “and we keep the right to respond.” However, London made it clear that a response is not immediately expected.