On April 2, Donald Trump "kicked the bucket". It's not like he hadn't "kicked the bucket" before (the suspension of international aid under USAID, plans to cut state administration, the "turn" on Ukraine), but the announcement of new tariffs on goods from almost the entire rest of the world definitely caused turmoil - both in financial markets and among political circles.
Why is raising customs tariffs a bad idea (as opposed to stopping grants, for example)?
First of all, because of the way it was done. With a "thunder and a bang" that scared the stock indexes. And all together for many countries, which opens up the possibility of coordinated retaliatory actions.
As for the tariffs themselves, Washington may have grounds for raising them. After all, US exports to the relevant countries are generally taxed at even higher rates. But even the current "unfavorable" situation for the US economy has not prevented it from being the largest in the world for decades, and the American population - with one of the highest levels of purchasing power.
Yes, the US trade balance is highly negative, but this is unlikely to change with such "sharp moves". In general, the economy is a rather delicate system and lumbering interventions usually harm rather than help - history provides many examples in this regard.
Trump's decision to rely on higher tariffs has been criticized by both statesmen and economists, but we can assume that most of them are doing it "from their own bell tower" - some of them are worried about the consequences for their countries, others are worried about the foundations of the current global economic system.
Therefore, I will take the liberty of quoting the President of Argentina, Javier Milley, on the subject. Who is both geopolitically close to Trump and, in one year in power, can boast of serious successes in the economic stabilization of his country.
Here is what Milley said in his speech at the opening of the new session of the Argentine Congress, about a month before the American "Liberation Day":
"We must give back to Argentines the freedom to trade with whomever they want, so that goods and services can enter the local market and everyone can freely buy better quality products at a better price. For decades, under the premise of protecting a handful of jobs, the cost of living has been deliberately raised for millions of Argentines. In many cases, it even forces them to buy goods of dubious quality at completely distorted prices. It is not fair that only those who can afford to travel abroad can buy whatever they want at international prices. It should be for everyone. Opening markets will also open the doors of the world to Argentine companies, so that they can sell our products to 8 billion people in an international context, where what Argentina has to offer will be in great demand."
A unilateral increase in customs tariffs logically leads to a response - an increase in tariffs for the first country as well. Ultimately, this leads to an increase in prices. Or if one country exports pork to the other, and the second to the first - cabbage, a portion of pork and cabbage will become more expensive in both places.
If Trump had only raised tariffs for countries like China (which he has recognized since his previous term as a major geopolitical adversary and economic competitor), it would have been understandable. Countries that make cheap imports into the United States due to their extremely cheap labor. But why did he have to do the same for the European Union, for Canada? Instead of looking for how to "suffocate the panda together"...
There are voices of concern everywhere that the looming global trade war will lead to a global economic crisis. The question is what Trump wants to cause such a development of the situation.
One explanation is that the goal of the current administration in the White House is to restructure the global trading system and to some extent "reform" the global economy. It is interesting why such a change is initiated by the country that is the world's economic leader precisely under the current "status quo". Even more interesting is that Trump has surrounded himself with billionaires who have amassed their fortune precisely under the current system - well, doesn't that threaten their economic positions?
The other explanation is that Donald Trump is using tariffs as a tool to provoke negotiations. To achieve something. And why not eliminate tariffs between the US and the EU altogether? This was hinted at by Elon Musk 3 days after Trump announced the new tariffs.
And here we come to the question of whether the European Union can be expected to respond uniformly and adequately to this challenge.
The short answer is "yes".
First, because historically, the European Union first emerged as an economic union (European Economic Community). And when Donald Trump said that the European Union was created to "screw up" the United States, he was actually right. The unification of Europe, which started as a coal and steel union, went through a customs union and reached the Maastricht and Lisbon treaties, has always been driven by the Old Continent's desire to compete successfully economically (and politically, but the results there are much more unsatisfactory) with the United States.
And second, because if there is something that unites Europeans from individual countries (EU member states, but not only), it is the common economic interest. Donald Trump can mobilize and unite Europe in a way that even Vladimir Putin failed to do. Because outside of the countries on NATO's eastern flank, where citizens feel the Russian threat as real, in the western part of Europe they are not dying to fight for Ukraine. Nor are they inclined to "set themselves on military rails" - a necessary condition for European rearmament to make sense.
But the new customs tariffs introduced by Trump hit them directly in the pocket.
For now, this move with the tariffs looks like mega stupidity. Straight up, MAGA Trumpism. The risks are completely real and even if the worst scenarios pass, who needs this tension?
P.P. The new customs tariffs proposed by Donald Trump are categorically not in the interest of Bulgaria. Our country, as part of the EU, must respond adequately. This, in case anyone is wondering how I can write critically about Trump, after I have spoken favorably about him in previous materials.