All countries affected

Trump announces 25% tariffs on steel and aluminum

(Bild: AP)

President Donald Trump wants to impose tariffs of 25 percent on steel and aluminum imports into the USA. They are to be announced at the beginning of this week, as the Republican explained to journalists during a flight on the presidential plane Air Force One. 

They will affect all countries, Trump continued. There would be no exceptions, even for neighboring Canada and Mexico. In addition, Trump wants to introduce what he described as "reciprocal tariffs".

"Reciprocal tariffs" also planned"
Canada and Mexico are linked to the USA by the NAFTA free trade agreement. Trump also declared on the flight to the Super Bowl that he would announce "reciprocal tariffs". This means that the USA would impose import tariffs on products if another country imposes tariffs on US goods. "Quite simply, if they charge us something, we charge them something," explained the US President.

When asked by a reporter when the reciprocal tariffs would come into force, Trump replied: "Almost immediately." The new tariffs on steel and aluminum will be announced by the head of state on Monday, the reciprocal tariffs "probably on Tuesday or Wednesday".

Trade war initially averted
It was only at the beginning of the week that a North American trade war with uncertain consequences for the global economy was averted for the time being. Trump agreed to concessions, primarily on border security, just a few hours before threatened punitive tariffs of 25% on goods from neighboring Mexico and Canada were due to come into force. In return, he postponed the trade restrictions for at least 30 days.

However, the US President did not make any concessions with regard to economically powerful rival China: punitive tariffs of ten percent on all Chinese goods came into force on Tuesday.

After returning to the White House on January 20, Trump also renewed his tariff threat against the European Union. Trump wants to strengthen the USA as a production location and reduce the trade deficit with Europe.

EU determined to act
The EU recently showed its determination towards Trump at a summit in Brussels. German Chancellor Olaf Scholz and French President Emmanuel Macron announced European countermeasures should the US impose additional tariffs on EU goods.

EU diplomats said that the European Commission had already been preparing possible countermeasures for some time. During Trump's first term in office, the EU countered new levies on steel and aluminum products from Europe with special tariffs on bourbon whiskey, Harley-Davidson motorcycles and jeans, among other things. How strongly the EU reacts this time will depend on Trump's specific tariff decision.

New tariffs on imports from Europe would be a particularly severe blow for the export-heavy German economy, which has already shrunk for two years in a row. The USA is the most important sales market for German exporters. The German economy, in turn, is closely linked to Austrian industry. Economists fear a trade war between the USA and the EU.

India approaches Trump
Meanwhile, according to information from government circles in New Delhi, Indian Prime Minister Narendra Modi is apparently preparing additional tariff cuts ahead of his meeting with Trump. The measures are intended to boost American exports to India and avoid a potential trade war, according to insiders. Tariff cuts in at least a dozen sectors, including electronic, medical and surgical equipment as well as some chemicals, would be affected. Modi's early visit is intended to avoid a "trade war-like situation between the US and China", according to government sources.

Trump had previously described India as a "very big beneficiary" of trade and emphasized that the country should buy more US-made security equipment in order to achieve fair bilateral trade relations. The Indian Prime Minister is expected to visit Washington on Wednesday and Thursday. The US is India's largest trading partner. Trade relations between the two countries have grown steadily over the past decade.