Mexico, Canada, and the EU say they will retaliate against the new tariffs on steel and aluminum, but what does that really mean for America? Trump has levied a 10% tariff on imported aluminum and a 25% tariff on imported steel which took effect yesterday morning.
According to prominent economist Jeffrey Sachs:
"Trump's trade actions are blatantly illegal. They are flimsily justified as an act of national security, but this is sheer nonsense. By instinct, we strive to make sense of Trump's nonsense, implicitly assuming some hidden strategy. There is none."
The U.S. is the world’s biggest steel importer and 17% of our steel coming from Canada and 9% came from Mexico, and both of those countries have now promised to add tariffs on American products.
If the tariff talk is giving you a feeling of deja vu you aren’t alone, these tariffs were actually announced in March, but our North American neighbors and the EU were given a reprieve. Most thought that they would be renegotiated before the reprieve expired, but they haven’t.
"His is a psychopath's trade war. The result will be to undermine the long-term role of the dollar; ratchet up the public debt; and undermine the current expansion through a spiral of protectionist measures and rising uncertainties for business."
So, likely, here comes the retaliation...