Trump, a fanatic against the entire world, announced the increase of 30% tariffs on imports from all of Europe and even Mexico, and threatens Brazil with 50% tariffs.
This economic war will affect both sides (that is, the US as well).
Several European companies that export products will be severely affected, as will the European economy as a whole (is this Trump's plan?).
However, the US imports a large number of essential products, such as meat from Brazil and fruits and vegetables from Mexico, and will also be severely affected by being economically isolated like an "island."
We live in a global world, with an exchange of goods and services, but Trump seems unaware of this.
The European Union, through some leaders such as European Commission President Ursula von der Leyen and French President Emmanuel Macron, announces that it will retaliate.
Trump, in turn, threatens to raise tariffs even further.
US will also be affected
American companies and consumers will be hurt:
Higher production costs: Many American companies depend on components, materials, and intermediate goods from Europe (e.g., car parts, machinery, electronic equipment).
With 30% tariffs, these inputs become more expensive, increasing production costs locally.
This will result in:
Price increases for American consumers.
Reduction in profit margins for companies unable to pass on the costs.
Disincentives to production and investment in import-dependent sectors.
b) Impact on American consumers:
End consumers will pay more for a variety of products, from automobiles to processed foods, cosmetics, and electronics.
Tariffs act as an "invisible tax" on consumers.
Retaliations from Europe, Brazil, and other countries
a) Barriers to American exports
Countries affected by tariffs (such as the EU and Brazil) tend to retaliate with similar tariffs on US products.
This directly affects:
American exporters, such as producers of soybeans, corn, meat, cars, technology, and luxury goods.
Agricultural and industrial sectors, which depend heavily on foreign markets.
b) Cascade effect
Decrease in exports → reduction in production → unemployment in affected sectors.
Macroeconomic effect:
Inflation (price increases).
Economic slowdown.
Increased global trade tensions, which affect financial markets and supply chains.
Possible decline in stock markets, especially in sectors most exposed to international trade (industry, technology, automobiles).
Silvio Guerrinha
0 Comments