US President Donald Trump has imposed tariffs on goods from Canada and Mexico, as well as China, sparking fears of a global trade war. The move will increase tariffs on £17 billion worth of US goods entering Canada, while Canada has retaliated with its own tariff measures.
Canada’s outgoing Prime Minister Justin Trudeau stated that the country would not back down, adding that the US had “cooperated” in combating drug trafficking and border security issues. Mexico has also ordered retaliatory measures against US imports.
China claims that Trump’s move “seriously violates” World Trade Organisation rules. The tariffs are expected to raise prices and inflation in the US while harming growth.
However, Trump’s allies suggest that the measure is a negotiating tactic, aiming for progress on border security and other issues. The president has also set his sights on the EU, with the bloc gearing up to retaliate against US tariffs.
The UK government will face an awkward decision, as it tries to balance its relations with the new US administration while pursuing closer ties with the EU. Some experts warn that UK trade diversion and supply chain disruptions are likely, despite efforts to negotiate a deal.
Despite Brexit-related limitations, some argue that a better deal with the EU could offer the UK its quickest route to growth, potentially worth up to 0.7% of GDP. The UK’s Labour party will need to be bold in negotiations, considering key demands like a youth mobility scheme, which may require concessions from the government.
As the situation unfolds, it remains to be seen whether Trump’s measures will lead to tangible progress or further exacerbate global trade tensions.
Source: https://www.independent.co.uk/voices/editorials/starmer-trump-tariffs-trade-links-eu-b2690753.html