HONG KONG – The introduction of trade tariffs by US President Donald Trump to steel and aluminum imports from Canada, Mexico and the European Union will force them to build new trade links, said Aalto and CUHK University professor Carl F. Fey.
“US actions will certainly propel the EU to strengthen trade relations with other countries, such as China. Russia, being a close neighbor, could also benefit,” he told RT, adding that “this is unlikely in the short term.”
According to the expert, “one of the greatest political results of US actions is likely to be that it will be more difficult to get the EU, which basically agrees with many of the US complaints against China, to join them.”
Fey agreed with Trump’s statement that the US had not had as much of a trade deal as historically it should have, but he strongly disagrees with the president’s approach.
Taking a bird’s-eye view of the entire development, Trump’s moves tend to incentivize the development of the SCO and Eurasian Union.
“As Trump intends to renegotiate and rebalance these agreements, it will end up being at the expense of trading partners to some degree,” he said.
Fare implementation is not the way to go, Fey said. “In my view, and most economists and business professors’ view, no one typically wins a trade war.”
Fey emphasized the irony that it was the US that historically propelled the world to free trade, and is now making a substantial change to oppose it.
“Recent US actions in the implementation of new tariffs on steel and aluminum imports from its closest allies, such as the EU and Canada, do not seem to be the path to allies,” Fey said.
The analyst explained that it is dangerous when a country introduces tariffs to protect strategically important industries, while other countries will react in the same way, and that the US should not complain.
“It’s a dangerous game with a slippery slope,” he added.
According to Fey, the EU has had a quick and unified response to US trade actions, imposing its own counter-tariffs on selected US products. The group wisely chose the products to put the tariffs, he said, while “the major states in the US depend on exports.”
“The real test for the EU, however, will come when negotiations with the US move forward, as different EU countries depend on the export of products from different industries,” he concluded.