Donald Trump's victory in the US presidential election yesterday sent European stock markets into a tailspin. The DAX posted its biggest single-day drop since August, and other stock indices also lost gains.
Why? Why?
The controversial 45The eIn the coming months, the president will take the reins of power. He has made it clear that he wants to put America first again and has promised to raise tariffs on imports by at least 10 billion, and perhaps as much as 20 billion. Chinese import taxes could increase to as much as 60 billion.
Trump does not like trade deals. Existing agreements could be renegotiated or even canceled to put America's economic interests first.
What will be the effect of Trump's tariffs?
The plan's potential has already been criticized by economists. Any import tax adopted by America would likely trigger a global response.
This would drive up prices and run counter to the new president's mandate to put America and its citizens first.
The United States has already charged consumers more than other countries. In the first half of this year, EU food and drink imports cost an additional €1.5 billion.
This was not due to price increases or higher volumes. The majority of the increase was not due to higher volumes or general price increases. You can find out more hereA higher level of production is largely responsible for this. Olives and olive oils are expensive.. Would American businesses and consumers be willing to spend 10 % more?
US tariffs are not necessary to stress the European economy. Most European economies are growing slowly and are lagging behind those of the United States. They also face political pressure from far-right groups in Germany and France.
US tariffs could have a bigger impact than just price hikes. Add to that the ongoing Russian invasion of Ukraine, a conflict Trump claims he can resolve in a day. It could lead to a global financial crisis.
The European Commission faces Trump
Warring parties in Europe could also prevent the Union from working effectively together to convince Trump to show clemency.
In a congratulatory statement to Trump yesterday, Ursula von der Leyen, the president of the European Commission, reminded the EU and the US of what is at stake. She said: “Let us work together to create a transatlantic relationship.”
The stability and vibrancy of our relationship are essential to the creation of millions of jobs and the flow of billions of dollars in trade and investment on both sides of the Atlantic.
Will Trump be able to see the benefits of maintaining the status quo, and will this be possible for a while? Trump voters are clear: they want change. But, as with Brexit, will they understand what that means?
It’s just about the economy. Trump’s views are (literally!) earth-shattering and extend to immigration, the environment and security. All of these topics impact European food and beverage consumers.
English 
French