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President Trump\u2019s announcement of sweeping tariffs on America\u2019s trading partners has widened the rift between the United States and some of its closest allies while reconfiguring the global economic order.<\/p>\n
Mr. Trump\u2019s plan, which he unveiled on Wednesday and is calling \u201creciprocal,\u201d would impose a wave of tariffs on dozens of other countries. Among major economies hardest hit were the European Union, which will face 20 percent tariffs under the plan, and China, which will absorb an additional 34 percent on top of existing levies.<\/p>\n
\u201cThe scope and size of tariffs are both substantial and confirm the worst fears of the proponents of free trade,\u201d said Eswar Prasad, professor in the Dyson School at Cornell University. \u201cTrump is setting off a new era of protectionism that will reverberate worldwide.\u201d<\/p>\n
Mexico and Canada, two of the United States\u2019 biggest trading partners, would not be subject to any new tariffs beyond the levies the president had previously announced, on imported vehicles, vehicle parts, steel, aluminum, and any other goods not traded under the rules of the U.S.-Mexico-Canada Agreement.<\/p>\n<\/div>\n<\/div>\n
The new levies include a base line 10 percent tariff on all countries except Canada and Mexico, as well as additional tariffs based on the tariffs other nations apply to U.S. exports and other barriers the administration has deemed unfair.<\/p>\n
The announcement Wednesday was the latest step in a trade war that has been developing for weeks. Mr. Trump has already imposed steel and aluminum tariffs, announced car tariffs and threatened retaliatory tariffs on European alcohol. He has threatened \u2014 and then backed away from<\/a> \u2014 steep levies on goods coming from Canada and Mexico, while imposing a different set on China.<\/p>\n<\/div>\n<\/div>\n The many-fronted assault has left global partners reeling.<\/p>\n \u201cIt is forcing U.S. allies, which have taken for granted for decades that they can count on the U.S., to re-evaluate,\u201d said Adam Posen, president of the Peterson Institute for International Economics in Washington, which supports free trade. \u201cIt is already changing America\u2019s role in the world.\u201d<\/p>\n European allies have announced plans to retaliate to an earlier wave of steel and aluminum tariffs, and they have been clear that they could respond to the growing trade conflict by creating barriers for services like big technology companies. Others, like Australia<\/a> and Britain<\/a>, have chosen a more wait-and-see approach.<\/p>\n<\/div>\n<\/div>\n The common thread is that many of America\u2019s friends increasingly find themselves playing defense against Washington, a posture that could change international relations and the global order for years to come.<\/p>\n For countries like the E.U., \u201cit is a very high number,\u201d said Jorn Fleck, senior director with the Europe Center at the Atlantic Council, explaining that the adjustment to such tariffs would be very painful for consumers, workers and businesses.<\/p>\n \u201cThese supply chains, you can\u2019t shift them over night,\u201d Mr. Fleck said. \u201cThis ignores how a highly integrated trans-Atlantic relationship works.\u201d<\/p>\n Many are questioning what the end goals might be<\/a>. Mr. Trump has at times argued that he wants to force companies including automakers and drugmakers to produce in the United States. He has also said that the point is simply to rectify unfairness. And he has said tariffs will help to pay for tax cuts.<\/p>\n For America\u2019s global partners, the purpose matters<\/a>. If the point is to make the trading system more fair, that would suggest an openness to negotiation. Europe could fiddle with any tariffs on cars, for instance, to try to press the Trump administration to take a less aggressive stance.<\/p>\n<\/div>\n<\/div>\n If the point is to raise money for American coffers, that\u2019s a more difficult starting point<\/a> for trading partners. In that case, finding an agreement that reduces the planned tariffs would mean reducing any potential revenues.<\/p>\n Given the uncertainty, America\u2019s partners have been trying to learn as much as they can about what\u2019s coming, while rolling out measured responses<\/a>.<\/p>\n Europe, for instance, has taken a more aggressive posture than many individual nations \u2014 announcing plans for retaliatory tariffs on whiskey, motorcycles, farm goods and a wide range of other products in response to steel and aluminum levies. But it has already delayed those measures until the middle of April, and policymakers have yet to announce exactly how they will react to the latest round of tariffs.<\/p>\n Instead, officials have made it clear that they are willing to respond forcefully \u2014 including, perhaps, by using a recently created tool that would allow them to relatively quickly place penalties like tariffs or market access restrictions on American technology companies like Google. The tool could also be used to hit other service firms, like banks and other financial services providers, outside lawyers and analysts have suggested.<\/p>\n \u201cEurope holds a lot of cards,\u201d Ursula von der Leyen, president of the European Commission, said earlier this week<\/a>. \u201cFrom trade to technology to the size of our market.\u201d<\/p>\n<\/div>\n<\/div>\n The goal would be to gain leverage. E.U. nations are trying to throw around the weight of the 27-nation bloc\u2019s consumer market to force Washington to negotiate.<\/p>\n That is also why the bloc is, so far, sticking together. Many European nations have made the calculus that, with their combined populations and markets, they are more powerful united.<\/p>\n Still, plans to push back have been made more difficult because other geopolitical topics have become closely interlinked to the trade conflict.<\/p>\n For Europe, military goals and technology regulation have become caught in the dispute. The United States wants the European Union to shoulder more of the burden for its own defense<\/a> while also dialing back restrictions on large technology companies, including regulations meant to ensure that they are enforcing content standards.<\/p>\n