Trump's unabashedly pro-trade-war stance has triggered widespread concern among America's trading partners worldwide. Trump plans to impose high tariffs on steel and aluminum in order to diminish the U.S.'s towering global goods deficit, which currently stands at $810 billion. He has also set his sights on putting tariffs on European cars. Trump believes the EU's policies render it nearly impossible for the U.S. to conduct business with them. Even worse to Trump, the EU tends to "send their cars and everything else back to the United States," letting them profit twice off their trade with the U.S. Trump eyes a 25% tax on European cars. The EU has threatened to respond with a "tit-for-tat" levy on imports such as "shirts, jeans, cosmetics...motorbikes and pleasure boats... orange juice, bourbon, corn, and other agricultural products" and "steel and other industrial products."
To experts, Trump's projected course of action amounts to a declaration of international commercial conflict. The Trump administration has already announced plans for broad tariffs on steel and aluminum -- 25% and 10%, respectively. Trump has also commented that certain statistics on percentages of steel imported by the U.S. and the corresponding exporting nation are misleading, because extremely large exporters may export first to other nations, and then use those nations to ship to the U.S.
These duties will be imposed under an obscure, Cold-War-era law that allows presidents to pull back on imports that they believe may threaten national security.
Many foreign companies are responding by diverting their business deals. Swedish appliance maker Electrolux AB claimed it would not move forward on the planned $250 million investment in the U.S. Experts worry that tariffs will increase steel prices in the US market, which will merely be the beginning of a trade war, or retaliation from countries worldwide. Most experts believe that trade wars are bad news for the economy and nation overall. As such, policymakers have spent decades attempting to forge global alliances and institutions to prevent the possibility of trade wars, resulting in the formation of institutions like the World Trade Organization.
Trump disagrees with most economists and policymakers. He believes that trade wars can be highly useful tools of national aggression. He also believes that refraining from trade wars when they might be profitable is a display of weakness. Republicans nationwide have even voiced their concerns. In case a trade war does really take place, American consumers may end up paying more. America-based exporters will lose foreign business, if other countries decide to close off trades with the U.S. This issue has divided Republicans into nationalist and globalist camps.
Ultimately, experts fear that the U.S. will be disadvantaged by massive job loss. Trump associates like House Speaker Paul Ryan, and Republicans on Capital Hill are now lobbying Trump in hopes that they can soften the tariffs, by making them more specific and therefore limiting their impact.