The only predictable about US elections was that it would be unpredictable. Trump has already made a bold number or statements about his policy plans, including a series of new sanctions and tariffs against the main nations. While the united neighbors of the United States seem to be more affected from them, there could be a domino effect that extends far beyond North America. So what could be the impact on European companies, and what would happen if something can be done to mitigate it?
What Trump is planning
Trump’s planned rates have largely focused on nearby neighbors Mexico and Canada, which constitute a large proportion of imports to the United States. The new president has threatened to impose a 25% rate on all imported goods from Canada and Mexico. Despite those who have been waiting for now, 25% tariffs on all aluminum and steel imported from any country outside the United States, Trump also promised a “addition” rate of 10% to China’s tariffs. The aforementioned has also pointed out to China as a source of fentanil, part of an ongoing opioid epidemic in the United States.
None of these seems particularly wise since Mexico, Canada and China are the three largest commercial partners in the United States, which constitute 40% of all imports, and the reaction of the United States stock market has led this fact home. However, the position has been politically convenient for many Republican voters, where there is no love for any of the three countries. Mexico has long been a source of criticism for immigration reasons, and Trump promised to “build the wall” on the border between the United States and Mexico. Meanwhile, Canada has been administered for a long time by the Liberal Party of the Izquierdo Center, with Trump and Prime Minister Justin Trudeau who do not carry out their first mandate.
Trudeau has just renounced, so it remains so, a potential change in the government will influence this relationship. However, China has been a repeated objective of economic sanctions, and not only by Trump: the Biden administration has imposed tariffs, including heavy tariffs in electric vehicles, whose development is perceived that it has state aid. The change of president also occurs in the middle of one case, the owner of Tiktok, and the accusations of Chinese espionage against the United States, everything that probably improves calls to heavy sanctions.
The impact on European companies
Europe is definitely a less immediate goal than the nations mentioned above, but this does not mean that they escape without Scottish, since Trump promised Sunday to implement tariffs with the EU “very soon.” While it was not a great focus on the electoral campaign, Trump has begun to group the European Union in its tariffs. Duration A press conference in Mar-A-Lago, Trump discussed the fact that the United States has a “commercial deficit of $ 350 billion” with the EU, and accused the block of not accepting cars or American agricultural products, promising that the United States corresponds to this. He also said that tariffs would be placed in the EU unless the block was committed to “the large -scale purchase of our oil and gas.”
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In boats, the president’s wishes can collide with the reality of the harsh reality of demand. In the absence of any reversal of food standards, there simply does not seem to be a great demand for most American agricultural products in Europe, while US car manufacturers are competing in a leveling playing field of local and international competitors. Meanwhile, oil and gas sales occur in the midst of a generalized impulse for renewable energy, both to meet zero net goals and to reduce dependence on the continent of Russian gas imports.
However, beyond Trump’s direct promises, we have already seen how changes in policies could put the United States and Europe in Loggerheads. The goal decision to reduce data reception is an obvious attraction for the incoming president, and has caused strong criticism of multiple European leaders, which could possibly lead to a prohibition similar to that which had Delow now Tikp. If this happens, it is possible that retaliation can arrive from the US. In foreign technology businesses, something that might not be explicitly aimed at emerging European technological centers, but could affect them in a form.
What happens later
Does this mean that tariffs on the EU are inevitable, and then, and what about the United Kingdom? A useful starting point is to look at Trump’s previous term, where washing machines, solar panels, aluminum and steel produced anywhere outside the United States were imposed. In response, the EU was one of the many commercial partners to announce reciprocal tariffs on a much broader range of goods, from agricultural property to cosmetics. The United States returned to the bet, which put a 25% tariff on many luxury foods, drinks and fashion items. This threatened to become a commercial war, and taught even the presidency of Biden so that both parties add exemptions.
Then, for European companies, steel and aluminum tariffs represent the greatest threat and impact on American companies, supply chains and the stock market, without a doubt, they will have some blow effects throughout the world, but also notes that a larger tariff has been AI and manufacturers of central chips for the development of AI. This is not an area in which Europe represents a competitive threat, with the main manufacturing bases in Asia.
An unlikely but equally fascinating scenario is that in which the United Kingdom becomes a bastion of American European trade. Although Trump has said that the United Kingdom is “offline” in terms of commerce (although the president refused to go into more details about what that meant!) It seems that it has a slight light whose EU faction Brexit Brexit appeals to Trump’s conscience. Hey, also cool the hope of the United Kingdom saying that something “can be resolved” without tariffs that begin allowing the United Kingdom Prime Minister Kier Starmer, breathing before negotiations begin. Althegh, the British steel industry is waiting for any rate that can affect the £ 400 million in that industry.
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If tariffs are applied to products and goods against the EU but not against the United Kingdom, we could see a partial reversal of some of the effects of Brexit, with companies that move or open sectors in the United Kingdom to relieve associated with export. This could also also promote greater EU concessions to the United Kingdom to further facilitate the EUK-EU trade, which leads to a new policy benefit from the United States in both parties. Could Starmer take advantage of the commercial war and offer companies a safe shelter to import goods and then export to the US?
The current period is tumultuous, and it is always difficult to predict what Donald Trump will do below. The best advice for companies at this time is to wait and see what is the final result of their position. Although previous commercial wars establish a worrying precedent, reality this time seems that the EU is not the main objective of US sanctions, and that the United Kingdom could be found in an interesting and possible beneficial position.
