The trade war between the United States and the European Union is intensifying. Faced with Donald Trump's decision to impose customs duties of 25 % on steel and aluminum, the EU replicates by announcing sanctions up to 26 billion euros. This escalation could have major consequences on the economy (especially the raw materials market).
Europe counter-attacks to preserve its economy: 26 billion euros at stake
The EU reacted without delay the new taxes imposed by Washington. These Protectionist measures penalizes European industries. But not only! They also weaken trade relations. With these new sanctions, the EU seeks to restore balance in an international market already under tension.
Among the products referred to in European reprisals, we find:
- foodstuffs,
- clothes,
- American manufactured goods.
The European Commission plans to strike these imports in order to exercise Pressure on the key sectors of the US economy. In addition, the implementation of these sanctions from April 1 leaves a negotiation period with Washington. That said, the position of the Trump administration remains adamant.
The impact of these measures will be major for the European industries which depend on imported raw materials. Inflation could also be reinforced by the increase in production costs. The automotive sector, particularly consumer of steel and aluminum, fears a drop in competitiveness in the face of imports from other regions of the world.
An economic crisis that worries investors
THE repercussions are not limited to steel and aluminum. China, also affected by these measures, has promised to take all necessary measures to protect its exports. The domino effect on the global economy is therefore palpable. The fact is that trade tensions weigh on investments, increase the risk of recession and feed inflation.
The United States imports around 50 % of its steel and aluminum. These are indeed essential raw materials for sectors such as construction, automobile and defense. This dependence on foreign markets could paradoxically weakening the American economy In the long term, while businesses will have to deal with increased costs.
Between American protectionism and European retaliation, the trade battle continues to affect the global economy. These tensions could create new opportunities for Crypto investors, while weakening strategic sectors. It remains to be seen whether the negotiations will alleviate the impacts of this tariff climbing!
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