Donald Trump announced on Tuesday that in response to the Canadian province of Ontario's price increase on electricity for Americans, new tariffs will be imposed on Canada. This time, the message is that from March 12, tariffs of 50 percent will be introduced on steel and aluminum from Canada.
We are in a trade war here where one side imposes tariffs and the other side imposes counter-tariffs and then escalates it, says Elisabet Kopelman.
Affects US Companies
She notes that in the case of the trade war between the US and Canada and Mexico, it is harmful to all parties involved. Since the economies are so integrated, this will also affect American companies.
Canada has chosen to respond to this. Even though Trump eased the tariffs, he did not completely remove them, and then Ontario has responded in kind and introduced an additional fee on electricity.
This signals, according to Elisabet Kopelman, that they are willing to take economic damage to show that they do not accept Trump's tariffs, and thus the trade war escalates.
This contributes to uncertainty in the economy and is not positive in any way. And the fact that Trump has such a short fuse when it comes to trade measures is worrying.
Less Relief
Kopelman says that Donald Trump's approach, where he first announces tariffs and then withdraws them, creates a situation for businesses where it is very difficult to plan and act.
The relief that follows the various withdrawals becomes less and less as time goes by, since new statements are constantly being made.
