Tensions on Trump Administration Trade Plans Heat Up with North American Neighbors and European Union

Tensions on Trump Administration Trade Plans Heat Up with North American Neighbors and European Union



THE WORLD - Tariffs imposed by the Trump administration have Canada, Mexico, and the European Union reeling, as the U.S. has slapped a 25 percent taxation onto steel and 10 percent tax on aluminum. As a result of the tariffs, the countries on the other side of the coin are retaliating.

According to Reuters, $4 billion worth of trade between the U.S. and Mexico will likely be affected. Mexico has hard-hitting plans for the produce industry, with tariffs set for grapes, apples, cheeses, and steel, among other items.

While many produce items have been spared, cucumbers and gherkins prepared or preserved using vinegar or acetic acid have been added to the list of those tariffed by Canada, according to Canada’s Department of Finance. Some of the items on the country's list will be taxed 10 percent, while others will sit at 25 percent like the U.S.’s tariff on steel. Overall, about $12.8 billion will be subject to tariffs, which, according to CNNMoney, was the total value of Canadian steel and aluminum exports that made their way to the U.S. last year.

The disagreements on trade have many wondering how this will reflect on the NAFTA negotiations that have been long and tumultuous.

“A trade war is when there is an escalation of conflict. In this case, it is simply a response to a first action,” Mexico's Economy Minister Ildefonso Guajardo told Mexican radio, according to Reuters. “We should stick to the clearly defined battlefield, where the response is appropriate and proportional.

The White House

But it is not just NAFTA participants that are bearing the brunt of the opposing trade views. The effects of these tariffs reach beyond the U.S.’s North American neighbors. Those in Europe are feeling the heat from the administration’s attempt to crack down on China’s presence in the steel and aluminum industries, a move that is not settling well with the European Commission.

“The United States now leaves us with no choice but to proceed with a [World Trade Organization (WTO)] dispute settlement case and with the imposition of additional duties on a number of imports from the United States,” President of the European Commission Jean-Claude Juncker said, according to CNNMoney, expanding that tariffs will affect about $7.5 billion worth of US exports and that the Commission would lodge a case with the WTO.

According to The Washington Post, these tariffs will result in higher prices; even as Trump argues they are put in place for national security purposes. This is because items like beer cans, cars, and other items using metals, which will increase in cost because of the tariffs, will be higher priced.

The cause of these blanketing tariffs on U.S. allies is to curtail China’s stronghold over the steel market, according to The Washington Post.

“China’s direct exports to us are quite small, but their impact on the overall market is quite large,” said the U.S.'s Commerce Secretary Wilbur Ross. “That was the fundamental reason why this [tariff] had to be very wide ranging.”

How will this latest development in the U.S.’s trade negotiations translate into the industry’s fresh produce sales? AndNowUKnow will keep you updated with the latest.