Trump has moved forward with his proposed plan, signing an order for a 25% tariff on steel imports and a 10% tariff on aluminium. However, he has weakened the impact of his proposed tariffs by agreeing to exemptions for Canada, Mexico and Australia. The EU and China are waiting for more details on how the tariffs will operate before making their next moves.
Changing the Lineup
First, Gary Cohn, Trump’s chief economic advisor, resigned. Cohn is the former president of Goldman Sachs and vocal advocate for free trade. With his departure, the White House lost what was perhaps its main pro-trade bastion.
Even more recently, Trump fired his secretary of state, Rex Tillerson. Tillerson has also voiced concerns over the tariffs, though no reason for his termination has been publicised so far. He is being replaced by CIA Director Mike Pompeo.
On the Horizon
As Trump’s support system is rearranged, the growing influence of protectionist advocates such as Peter Navarro signals an increased risk of trade war. Indeed, the tariffs are causing high tensions between the US and both China and the EU. We’ll continue to monitor the tariff developments and keep you informed as further details materialise – but we can be sure that headlines highlighting trade issues and Trump’s tariffs won’t be disappearing anytime soon.
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