The first shots in US president Donald Trump’s trade wars (“good and easy to win”) have been fired. Who is most likely to be hurt? And in particular, were some of us right to say when Trump first started rattling his sabre that it would soon become clear that those bent on protectionism face high costs from turning words into action?
Quite right, it seems. The story of the week is how the EU’s retaliatory tariffs — which Brussels introduced in response to Trump’s tariffs on steel and aluminium imports from Europe — has prompted Harley-Davidson to move production for the European market out of the US to avoid import duties it says will add $2,200 to the cost of each motorcycle. It not the only example of domestic casualties from Trump’s trade aggression.
It is important to understand that this is not just a matter of the EU lashing out in revenge. That would fit Trump’s narrative and he could, with some justification, argue that the US can give harder than it gets, hence it stands to “win”. But retaliatory import duties are just one of three ways Americans are hurt by their president’s protectionism.