EU and US trade war has started

The European Commission introduced increased duties on some American goods in July 2018 in the amount of more than 3 billion dollars, which is the beginning of a trade war between the EU and the United States, RISS expert Vyacheslav Kholodkov said. According to him, this decision was reached in response to the introduction of increased duties on imports of steel and aluminum by the United States since June 1.

“Three billion dollars is not such a large sum for global trade, but the danger is that trade wars tend to escalate. New groups of products could become subject to various trade barriers, such as increased duties. It is also important to bear in mind that Washington is now facing the threat of two-front trade wars. One of the largest economic partners of the United States is China, and D.Trump has already promised to introduce duties on 1300 high-tech goods from China for a total of 50 billion dollars. The list of goods is going to be published in mid-June. There is a possibility that China will impose reciprocal duties,” RISS expert pointed out.

There is a split between the public opinion, the Congress, and the US government due to the threat of a trade war with China. “There is split between "pigeons", for example, Finance Minister S.Mnuchin, and "hawks " – Assistant to the President for National Security J.Bolton, R.Lightheiser, W.Ross, and Economic Adviser P.Navarro. The group of hawks dominates the group of pigeons,” the analyst said.

“The main negative impact of trade wars is the threat to global supply chains. Now manufacturing is carried out using components from many countries. This inevitably leads to a decline in global trade, a slowdown or even a recession in the global economy. Such a scenario is undesirable for Russia, as at this time oil prices are sharply reduced. But there are also positive consequences: the European-American confrontation in the economic field, the U.S. attempt to put pressure on Europe, and the fact that the Europeans don’t want to follow the American policy shows that they may take an independent position on various issues, such as anti-Russian sanctions,” V.Khokodkov said.

economics trade EU