Recently, Angela Merkel, Chancellor of Germany, warned against a possible trade war with the U.S. amid threats from President Donald Trump to hit Europe with heavy auto import tariffs.
Merkel told lawmakers in Germany that the dispute going on over tariffs between the Unite States and Europe already shows signs of a “trade conflict” that could quickly worsen into an all-out trade war if the tensions aren’t taken care of.
“We now have tariffs on aluminum and steel and we have a discussion that is far more serious,” said Merkel, referencing Trump’s threats to impose tariffs against Europe for auto exports to the United States.
“This has the character of a trade conflict,” Merkel went on. “I don’t want to use any other word for now. It’s worth every effort to try to defuse this conflict, so it doesn’t turn into a war. But this obviously takes two.”
In may, Trump moved to impose heavy tariffs on imported aluminum and steel from Canada, Mexico, and the European Union, which infuriated many key allies to the U.S. who called them a dangerous kind of economic protectionism.
The tariffs on metal sparked several retaliatory measures that targeted products from the U.S., like bourbon, blue jeans, and motorcycles.
This just made the President increase his threats of more duties on foreign products, including a potential tariff of 20% on all cars shipped from European to the United States.
In a recent report, The World Trade Organization gave warning of an increased amount of trade restrictions that Group introduced of 20 nations, saying such measures could compromise recovery and growth around the globe.
“This continued escalation poses a serious threat to growth and recovery in all countries, and we are beginning to see this reflected in some forward-looking indicators,” said Roberto Azevêdo, Director-General of WTO.