Perhaps unsurprisingly, Trump’s United States government is waging war again– another trade war. Whilst the China trade dispute is ongoing, the scene is set for introduction of tariffs between the US and EU. In response to EU subsidies that it claims support Airbus, the US has proposed tariffs on £8.4bn worth of goods including: salmon fillets, cheese, lemons and virgin olive oil.
Levies on imports of steel and aluminium from the EU were put into place by the US last year in order to strengthen those industries within the US. In response, tariffs were imposed by the EU on whiskey, motorcycles and orange juice. The newly proposed tariffs by the US would be in addition to those already in place.
In response to the newly proposed tariffs, the EU has proposed levies on £17.3bn of imported US goods, although exactly what this would affect has not yet been announced. With the knock-on effects to global markets from the US – China trade dispute being apparent, the escalation of a US – EU trade dispute would result in increased volatility for the global economy.
Should the levies be introduced, we could expect to see higher availability of salmon, cheese, olive oil and lemons in the EU, as US buyers are deterred from purchasing expensive European goods. Higher availability should see prices come down, and exploration into other markets to offload excess stock. The future introduction of tariffs is a key factor to consider when purchasing food, and it will be interesting to see how this current trade dispute develops.