Brussels and Washington brace for trade war escalation

A trader works on the floor of the New York Stock Exchange as markets react to worries of a trade war between the United States and China in New York, New York, USA, on 19 June 2018. The Dow Jones industrial average dropped over 300 points at the start of the trading day. EPA-EFE/JUSTIN LANE

Brussels and Washington brace for trade war escalation


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The European Union’s retaliatory tariffs on US iconic products kicked off on Friday, while Washington braces for further escalation.

EU tariffs are a response to President Trump’s tariffs on steel (25%) and aluminum (10%); the EU targets products such as Harley-Davidson motorcycles, bourbon whiskey, denim jeans, footwear, cranberries, makeup, orange juice, sweetcorn, and peanut butter, all selected because of their value for blue-collar workers that make up much of the President’s electoral base.

These are still measured retaliatory tariffs to the tune of €2,8bn.

However, the EU is ready to follow with a second wave of tariffs in March 2019; according to the Financial Times, Brussels is warning that it could scale up the trade war with tariffs worth a whopping $300bn if Washington makes good on its threat to ban European car imports.

Hinting on uncompromising stand, the US administration has apparently drafted legislation that would allow the President to unilaterally raise tariffs without Congressional approval, Axios reported on Sunday.

The so-called “United States Fair and Reciprocal Tariff Act” will give President Trump a freehand in ignoring World Trade Organization rules, differentiating tariffs for states that do not have bilateral trade treaty with the US.

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