Filenews 6 April 2025 - by Theano Thiopoulou
Three days after Donald Trump's trade attack in all directions, with the imposition of a series of new tariffs, investors continue to wonder about the impact on inflation, the growth of the global economy and the costs it can bring to the American economy itself and the country's households.
The readings on the sweeping tariff measures announced by President Trump have several points in common, and the assessment stands out - and it is repeated - that the consequences will also be harsh for American citizens, in addition to those who live and work in countries whose economies depend on exports to the United States.
"F" gathered views that also point to the other side of the coin, namely that the blow will not only be suffered by countries facing Trump's increased tariffs, such as EU members, China, Japan and Canada, but also by the United States itself.
The return of investors
"Why is the American President resorting to this weapon, while everyone is warning that the consequences will be harsh not only for the trading allies, but also for the American economy itself and its households? Because it deeply believes that the unjust practices of other countries, which have been "deceiving" and "raping" the United States for years, are responsible for its deindustrialization. And because they have convinced him that in this way factories and jobs will return to American soil", says the electronic edition of "Naftemporiki".
This is officially the goal. Because, as Dr James Scott of King's College London comments, it is extremely difficult to say with certainty what Trump really intends. Tariffs are announced, then postponed, then imposed, then partially cancelled, then increased in retaliation to other countries, and so on, creating an endless chaos of conflicting messages and disorder.
"The economy is going back, if not to the 19th century, certainly to the 20th century, when the United States had lost 30 percent of its GDP," said economics professor Charalambos Gotsis, speaking on the show On Politics.
As he noted, "Mr. Trump may give orders, but the final decision will be made by the consumers of the United States." Asked if there will be any winners, Mr. Gotsis replied that everyone will be lost, while the United States will be the first to suffer damage.
A day before the U.S. president announced the tariff measures, ECB Chairwoman Christine Lagarde said that "quite often these tariff escalations, because they prove harmful even to those who impose them, lead to negotiating tables, where people sit and discuss and ultimately remove some of these obstacles."
What will happen to the cars
The tariffs have been put in place, and what many believe will hurt Americans the most and shake up their auto industry are taxes on imported cars.
As CNN reports in its analysis, "America's economy has evolved. Today it is a service economy rather than a manufacturing-based economy. The U.S. makes far fewer cars today, but they are still a key pillar of the economy, driving growth and millions of jobs. Cars are vital to the daily lives of Americans: they go to work, they shop, they travel on vacation.
Prices are already close to record levels, with a new car costing almost $50,000 on average. And in the coming weeks or months, prices will rise more, making it much more difficult to buy cars." As CNN points out, a $40,000 imported car will now be subject to a $10,000 tax. And that's a cost that the supply chain will shoulder. In the last week, according to CNN, Americans rushed to buy cars before the tariffs were implemented, with automakers jumping in sales in March, mainly on imported models.
There is another perspective for the next day. "China and Korea may be a window of opportunity for the EU, to see new partnerships with other regions of the world and not to see an increase in prices but alternative supply of basic items," said the president of the Hellenic Confederation of Commerce and Entrepreneurship (ESEE), Stavros Kafounis, regarding the new tariffs from the United States.
According to an analysis by Piero Cingari in Euronews, there is a possibility that the trade war declared by Donald Trump on the European Union and its productive forces will lead in the short term to a reduction in the selling prices of European products in the markets of member countries, due to oversupply. As Euronews explains, the US accounts for about 12% of the EU's total exports, which means that replacing this demand overnight is almost impossible.
Stelios Platis on the effectiveness of the measures
The Trump administration is presenting the new tariffs as a means of boosting public revenues, boosting domestic production, addressing trade deficits and, in the end, reclaiming U.S. industrial dominance, Dr. Stelios Platis, economist.
On the other hand, however, it notes that "this violent disruption of the rules of global trade balance may bring about inflationary pressures, increased costs for consumers, increased risk of a trade war, as well as geopolitical turbulence."
The experience of the tariffs imposed by the Trump administration in the period 2018-2022 provides useful historical context for any analysis, Mr. Platis points out. "Despite the initial support of some domestic industries, at the time, the tariffs were essentially largely passed on to American consumers, driving up prices and reducing their purchasing power.
Studies have estimated a decrease in real income of about $1.4 billion. monthly at the end of 2018. Although the tariffs were used as a negotiating tool (e.g. with Canada and Mexico), their effects remained controversial, while causing trade tensions, without the corresponding economic benefits."
Closer to us, Mr. Platis explains, "Trump's new tariffs are expected to deal a significant blow to the EU, as the United States is its most important export partner (€504 billion). in 2023). Critical sectors, such as the automotive and metals industries, are expected to be severely affected, resulting in losses in exports, production and employment.
European leaders have already called the measures unjustified, while the EU is considering countermeasures, such as tariffs on US products and restrictions on US technology or financial companies.
On the other hand, due to the particular problems within the EU and the lack of a common fiscal and foreign policy, I fear that further escalation may increase intra-EU tensions, particularly with regard to the countries most dependent on exports to the US, such as Germany and Italy.
In general, Trump's 2025 tariffs raise serious questions about their effectiveness and create broader uncertainties for the global economy, but also for European cohesion."
