The European executive has announced that it would retaliate against US tariffs on aluminium and steel if they are confirmed, considering them unlawful and counterproductive.
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00:00The European Commission said on Monday it would take action to protect the interests
00:11of European businesses and consumers if Donald Trump moves towards his threat to raise tariffs
00:17on aluminium and steel imports to 25%.
00:25Free trade advocates, meanwhile, believe that trade barriers would significantly harm growth.
00:32There is a lot of interdependence and the modern world trade is interdependent.
00:37Many products, the varying components of such products are manufactured in different countries.
00:44As we learned during the COVID experience and the vaccine manufacturing experience,
00:49I mean up to 50 countries were involved in different components of one vaccine, which
00:54illustrates the interdependence, the complexity of supply chains.
01:00The three largest exporters of steel and aluminium to the US are Canada, China and Mexico.
01:07In Europe, Germany, Italy, France and Austria, all of whom export metals across the Atlantic,
01:13would be the most affected by any imposition of tariffs.
01:18Trump already introduced tariffs on aluminium and steel during his first term at the White
01:22House.
01:23They were then replaced with quotas under Joe Biden.
01:28We could do as we did the last time around and retaliate on specific goods in the US.
01:33Last time we put in place tariffs on Harley Davidson motorcycles and jeans and stuff like that.
01:40And then, of course, the EU could do as it did on steel back then and impose a safeguard
01:45action, which is a tariff wall in the EU in general to protect EU producers.
01:52That is still in place since we imposed it in 2019 and it will run until 2026.
01:59These measurements could also potentially be counterproductive for the US.
02:03The impact for the United States is precisely the opposite of what Trump promised, which
02:08is to bring down inflation, to improve the economy.
02:12And I think what Europeans need to bear in mind is that Trump is not immune to political
02:18gravity.
02:20Another possibility is that Donald Trump could also use tariff threats in order to gain leverage,
02:25pushing EU member states towards increasing their defense spending or reducing regulation
02:30of the technology sector.