While most of the countries at the G7 summit in Canada hoped to negotiate tariffs, U.S President Donald Trump improvised a press conference where he said he did not endorse the G7 statement.
Mr. Trump said that “U.S is not a piggy bank to be robbed”, reports the Guardian. He reaffirmed his will to change tariffs on metals. Canada’s Prime Minister Justin Trudeau announced the European Union, Canada and Mexico will retaliate with sanctions starting July 1st.
While the G7 countries raised their concern about the American economy, Trump’s trade advisor Peter Navarro said there was a “special place in hell” for Justin Trudeau.
From trade war to Twitter war
Two intense days of negotiations failed in Malbaie, Canada. On Saturday, at the end of the summit, Canada’s Prime Minister Justin Trudeau announced G7 countries will start retaliatory sanctions against the U.S starting July 1st.
For U.S President Donald Trump, “Tariffs are going to come way down because people cannot continue to do that. We’re like the piggy bank that everybody’s robbing’.
What observers expected to be a trade war turned into a Twitter war a few hours after. The U.S President tweeted that “fair trade is now to be called fool trade”. In response to Justin Trudeau, U.S President Donald Trump made personal attacks against the latter, describing as “very dishonest and weak” and “acts hurt when called out”.
U.S economy at stake
While adding 25% steel costs and 10% aluminum prices to the European Union, Canada and Mexico, the decision will affect the market on a global scale. Those countries supply more than 50% of the U.S imported metal – but most importantly, it will hinder the American workforce.
Tariffs will hurt American workers first. Those who are working in the auto parts industry are likely to be standing at the frontline.
Moreover, consumers are also expected to feel the beat. Cars prices could increase by an average $300 per car for options, according to the Wall Street Journal.
In response to Trump’s decision, some manufacturing companies have threatened to shut down their factories – such as Bekaert Corporation, Kiswire America and Tokusen USA, reported the Arkansas Online.
Experts have raised concerns that Russia is likely to take advantage of this trade war, in order to offer more attractive prices.
A rising eastern bloc
As the New York Times analyzed, “Putin sees an opening in Europe’s fury With Trump”. Russia plans to offer better deals to the European Union and tighten its ties with several western countries.
During an interview, President Vladimir Putin said on Austrian television ORF that he wanted to see a “united and prosperous European Union because the European Union is our biggest trade and economic partner”.
Last Sunday, Vladimir Putin visited China. He said he would love to meet with Donald Trump “as soon as the American side is ready”, reports the New York Times. Specialists think that Putin is planning to surpass the U.S economy during his new term.
During his visit to China, Vladimir Putin declared that G7 countries had a weaker economy than the ones that are part of the Shanghai Cooperation Organization.
Bloomberg baptized this Chinese-Russian alliance a “rising Eastern bloc”, searching for new allies – taking advantage of a greater divide between the European Union and the U.S.
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