As if the prospect of renewed battle with China weren’t sufficient, Donald Trump introduced on Friday that he would double tariffs on metal and aluminium imports to 50%, Commerzbank’s FX analyst Michael Pfister notes.
Chance of a take care of the EU is shifting decrease
“The EU responded with uncommon severity, threatening to impose retaliatory tariffs. The EU had already introduced these after the US launched reciprocal tariffs, however, like Trump, delayed their implementation by 90 days to permit time for negotiations. Following this newest improvement, the chance of a take care of the EU might be shifting decrease.”
“Once we mentioned the specter of 50% tariffs on all EU items right here final week, we famous that the extent of tariffs appeared to have been set arbitrarily and was not restricted by these introduced on Liberation Day. Many international locations are more likely to query the steadiness of a possible take care of the US if the US administration imposes country-specific tariffs whereas concurrently elevating product-specific tariffs at random.”
“For instance, what profit does it deliver the UK to set tariffs at 10% if particular person parts are exempt and topic to ever-higher tariffs? With such erratic US commerce coverage, the place tariffs are solely going up, there’s a danger that different international locations will flip away from the US. In the long run, this isn’t excellent news for the US greenback.”
