The recent announcement from The White House on imposing tariffs on steel and aluminum coming into the US has had an immediate response from its trading partners, both in the form of words and action.
Tariffs are an antiquated form of protectionism that many experts agree are detrimental to both trading partners.
G7 members conveyed unanimous concern and disappointment, a sentiment echoed by the British Canadian Chamber of Trade and Commerce (BCCTC), and European Union (EU) members have decided to impose counter measures on steel, bourbon, peanut butter, cranberries, orange juice and other goods they receive from the US.
“There is a feeling that the President of the US is using this to pressure Canada and Mexico over NAFTA and his negotiations with the EU over a US–European Trade Deal,” stated Tom O’Carroll, VP of the BCCTC Toronto. “The EU have already stated that there will be no further talks and Mexico and Canada also have no plans for further meetings on NAFTA.”
Canadian Prime Minister Justin Trudeau conveyed disappointment and confusion, stating that “the idea that Canada is somehow a national security threat to the United States is quite frankly insulting and unacceptable.” He later stated that he had no idea what the US President hoped to achieve, as there was no rationale behind his actions of targeting the US’s closest allies, in the process weakening his position with those allies, and warned that US workers might be hurt by this action.
The announcement is also a concern within the US and the President’s own party, as Republicans scramble to craft legislation to require congressional approval on imposing tariffs, since the action goes against Republican ideology of free markets and open trade.
Meanwhile, countries such as China, Mexico and EU members are asking the World Trade Organization (WTO) to intervene as part of the WTO dispute settlement process.
One thing is sure, when it comes to trade, collaboration and cooperation are much more useful tools than taxes, which basically isolate and impact the industries a country is hoping to protect, with the end result being an impact on the country’s consumers and economy.