Last week, the President of the United States announced his intention to put in place protectionist measures to protect the American industrial fabric. These measures, supposed to protect American companies, ultimately turn out to be real threats to foreign markets.
In this tense international economic context, it is logical to question the consequences of such measures on the world economy and in particular North America.
Measures to protect the American steel industry
Initially, these new rules on international trade were to concern only imports of metals (steel and aluminum). The American president has indeed decided to overtax steel and aluminum by 25%. Donald Trump finally reinforced his remarks.
It seems to want to head towards a real import tax war with its trading partners. So the day after this announcement, he launched on Twitter “Trade wars are good and easy to win”.
Protectionism: A Tradition of US Trade Policy
At first glance, it seems that the United States is the most liberal country in the world. Indeed, the world's largest economy remains a privileged player for international trade. Especially since its currency, the American dollar, is the benchmark for trading in the world.
But by looking at the economic history of this country, we discover a nation much more protectionist than we might think. Before World War II, the US market was characterized by very protectionist regulation. Finally, it was not until 1945 that the economy of the United States became free trade.
However, some protectionist measures have been passed over the past twenty years. In 2002, the W. Bush administration set up a protectionist arsenal in favor of the American steel industry. Most of the time, these protectionist measures have proven to be counterproductive. President Trump is nevertheless determined to put new ones in place.
European protectionist countermeasures
In reaction to Donald Trump's decision to overtax imports, the European Commission has already announced that it will not react to counter-protectionist measures. It is certain that the measures taken by the Trump administration will harm the European industrial fabric since the United States is one of the main destinations for European steel.
The economic health of the European metallurgical industry is therefore in danger and with it employment in this sector. In this sense, if the United States sets up the surcharges announced, the European Union in turn plans to overtax products typically "Made in USA" such as Levi's products or even Harley Davidson. If this is the case, we will enter into a real trade war that could weaken the international economy.