News Analysis
The new auto tariffs are straining relations with U.S. allies and deepening doubts about America’s reliability as a partner.
Damien Cave and Steven Erlanger
Damien Cave often covers global affairs. He is based in Vietnam. Steven Erlanger has been covering European diplomacy and trade for decades, and is based in Berlin.
President Trump’s unexpected plan to impose a 25 percent tariff on cars and car parts imported into the United States will not only disrupt supply chains. It will also fuel anger, alienation — and pressure to retaliate — among American allies across the globe.
Many of the countries most affected by the new levies, such as South Korea, Japan, Germany, Mexico and Canada, are already reeling from the Trump team’s disregard for free trade deals already signed and his threats to long-established security relationships.
Prime Minister Mark Carney of Canada said on Wednesday that Trump’s move on tariffs was “a direct attack.” Other leaders reacted in muted terms, hinting that they were still considering how to respond, with another round of tariffs, in addition to this one, expected in early April.
“We need to consider what’s best for Japan’s national interest,” Prime Minister Shigeru Ishiba of Japan told Parliament on Thursday. “We’re putting all options on the table in considering the most effective response.”
The tariffs, which threaten both American and foreign carmakers, increase the likelihood of a global trade war. A chain reaction of economic nationalism with tariffs and other measures — perhaps adding costs for finance and services — could suppress economic growth globally, spread inflation and add rancor to already testy negotiations with Washington about security.
The European Union, which governs trade policies for its 27 member states, has been working for months on proposals for counter-tariffs if necessary. Those are designed to target areas of the United States that supported Mr. Trump in the last election. The United States is the E.U.’s largest trade partner, with nearly a trillion dollars of two-way trade last year, so new tariffs and counter-tariffs will have a dramatic impact on both sides, and sharply increase market uncertainty.
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Source: www.nytimes.com