US President Donald Trump signed an executive order on Monday evening that imposes a 25 pc. tariff on all steel and aluminum imported from other countries. This is a relatively hard blow for the countries that export steel and aluminum to the US, and which will now have to compete on unequal terms with US-produced raw materials that will not be affected by the increased tariffs. However, it will have no immediate consequences for Danish and European industrial companies, assesses Tore Stramer, chief economist at the Danish Confederation of Business.
- When you look at the figures, the vast majority of the steel and aluminum imported to the US comes from neighboring countries such as Canada, Mexico and Brazil and from South Korea and Vietnam.
- There is only a very small export from Europe to the US, says the chief economist.
He does not expect market prices to change significantly as a result of the punitive tariffs, because demand will probably remain unchanged.
- It is a market that is used to occasional turbulent waters. Therefore, I am reasonably calm and do not expect that this, seen in isolation, will affect Danish business to any significant extent, says Tore Stramer.
However, he will not deny that there may be derivative effects from Trump's aggressive tariff policy.
- This could be a step on the road to a more extensive trade war, which could mean that Danish companies come more directly into the firing line.
- The low visibility creates some nervousness that you as a company must deal with. This could result in greater caution when it comes to investments, and it could also make consumers hold back, says Tore Stramer.
At the Confederation of Danish Industry, they also fear the longer-term consequences of increased American tariffs. All other things being equal, a global trade war would be bad for an economy like the Danish one, where trade with foreign countries is so important. Peter Thagesen, head of geopolitics at the Confederation of Danish Industry, however, insists that the EU must respond if the US introduces tariffs that are in violation of international agreements.
- Only by playing on our strength can we gain Trump's respect, he says.
jel /ritzau/
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