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The US administration is moving forward with the implementation of 25% tariffs on Canada and Mexico and 10% on China. This decision has sparked concerns from the business community around the world. The US Chamber of Commerce has highlighted why these ‘unprecedented’ tariffs are not the answer to the problems the administration seeks to address as well as the associated economic risks (full statement).
With potential measures against the EU under consideration, the American Chamber of Commerce to the European Union (AmCham EU) similarly opposes the introduction of tariffs. They would be hugely destabilising for the transatlantic economy and would inevitably invite damaging countermeasures from the EU. The impact on global supply chains would be significant, with companies on both sides of the Atlantic likely to suffer. This would not address global unfair trading practices.
On Inauguration Day, President Trump took the right approach by ordering a review of US trade policy. The planned review should take into account the root causes behind trade imbalances, consult the parties most likely to be impacted and respect the rules of the international trading system.
Tariffs not only lead to countermeasures but also lay the groundwork for protectionist policies more widely, including in the EU. This is not the way to foster economic growth or resilience. Instead, governments should seek to build the resilience of their supply chains through diversification and collaboration. The best way for the EU and the US to address common trade and security challenges is by working towards a pragmatic transatlantic agenda. At a time of global instability, the US should look to collaborate rather than erode trust with one of its staunchest allies.
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