The first test is expected immediately after Donald Trump takes office in the White House. The newly re-elected Republican president has promised a wave of tariffs to protect the US economy. According to Tax Foundation calculations, during his first presidential term, “Tariff man” imposed restrictions on thousands of products with a total value of 380 billion dollars. Joe Biden’s administration has maintained most of these measures and, indeed, in May this year it decided to further increase tariffs on Chinese goods for a total of another 18 billion dollars. In fact, continuing the protectionist policy inaugurated by his predecessor to bring the production supply chain under control and stimulate growth. Where will Trump go next? If it is clear that the main rival is China, the commercial relationship with Europe could also become tense again – after years of détente. Even more so since the Eurozone’s trade surplus towards the US market has exceeded that of China. German, Italian and French companies in particular are destined to end up in the crosshairs.
There will be a taste already in March when the armistice signed between the two sides five years ago over the dispute over steel and aluminum expires. Trump had imposed tariffs on imports, deeming them a threat to national security. In retaliation, the EU raised barriers on Bourbon, Harley-Davidson motorcycles, yachts. According to an estimate from Brussels, the damage to trade was 6.4 billion euros. Biden chose the truce but it is not certain that it will continue. Once an agreement on the transatlantic partnership for a free trade area between Europe and the USA has faded away, with Trump’s return, trade relations become uncertain again.
the intervention
Europe should prepare for the tsunami of tariffs
Bill died on November 15, 2024
Automotive and chips: The escalation on electric vehicles and semiconductors begins
The automotive sector with its components is the hottest dossier. Also due to the crisis in the sector which, it is feared, will bite harder in 2025 and the weakness of a large producer like Germany. Beijing heavily subsidizes its production and, between 2009 and 2022, spent $173 billion to support the auto industry.: electric and plug-in hybrid vehicles, cells for electric batteries or semiconductors for microchips. But Chinese production overcapacity, stimulated by a torrent of incentives that have kept even non-competitive companies alive, has triggered an imbalance between supply and demand which, according to many analysts, risks lasting for a long time. Against the invasion of Chinese vehicles and tech products, Joe Biden has allocated generous public subsidies with the Inflation Reduction Act (IRA) for the production of EV models and batteries on American soilattracting numerous foreign groups or bringing back factories. Then, he moved on to increasing customs tariffs, gradually raised to 100% for Chinese electric cars. Brussels did the same definitively adopting additional duties of up to 35.3% on imports of Chinese electric cars. And Beijing has reported the case to the WTO. In short, it’s already escalation.
The consequences on the stock market
Neoprotectionism, duties, rates: with Trump’s victory, EU markets end up in the crosshairs
Fabrizio Goria 06 November 2024
Hi-tech green: Challenge with China on renewables and solar panels
In 2023, Chinese investment in renewable energy hit a record 6.3 trillion yuan (equivalent to $890 billion). Driving the sector – which has become a driver of the Dragon’s economy – is above all solar technology (followed by wind power). Today, China controls more than 80% of the world’s solar modules, polysilicon and wafers. To counter the invasion of low-cost Chinese solar panels (result of a mix of subsidies, excess capacity and a saturated domestic market with thousands of unsold units), in recent years the US has imposed various trade restrictions on the import of solar cells from Beijing. But, to get around the obstacle, many Chinese companies have transferred production to neighboring countries such as Vietnam, Thailand, Malaysia and Cambodia after Washington also increased imports from South-East Asia, India. The surplus of Chinese devices which has therefore found more outlets in Europe is a problem for the European solar industry, which cannot stand the competition.
If newly elected President Donald Trump lives up to his election promises, the new crackdown should bring universal tariffs of up to 60% for Chinese goods. Will it be enough to block access to the rich American market?
The madness of tariffs will hurt Europe and the USA
Veronica De Romanis 07 November 2024
Agri-food: Possible retaliation on our country’s wines and cheeses
Agri-food is the “Achilles’ heel” of various EU countries, Italy first and foremost. It is on foods and wines that the first retaliations in the event of trade wars fall. The reason is easy to say: in the first five months of 2024, EU agri-food exports approached 100 billion euros (up 2% compared to the previous year). For “Made in Italy” alone, the export of high value-added products exceeded 46 billion euros in 2023 and is further increasing. Yesterday, Beijing imposed duties on brandy imported from the Old Continent as a temporary anti-dumping measure for the Chinese market and says it is ready to do the same on cognac. And Trump? In his first term, he did not go lightly. In the Boeing-Airbus case – a dispute that has seen the two sides fighting for almost twenty years – he responded by imposing additional duties. A 25% blow that particularly affected cheeses, cured meats, wines and liqueurs. The armistice signed by Joe Biden in 2021 expires in July 2026. For our country (the world’s leading exporter of cheese to the USA), the bill could be steep. Italy covers 20% of American dairy imports and, between Grana Padano, Parmigiano Reggiano and pecorino, it exceeds 440 million euros. At the time, it cost more than 100 million.
