The economic impacts of Trump’s tariff proposals on Europe - Aurélien Saussay

Kyriacou,GA

It is funded by the Grantham Foundation for the Protection of the Environment, which also funds the Grantham Institute – Climate Change and the Environment at Imperial College London. [...] This shift towards protectionism was particularly evident in the withdrawal from the Trans-Pacific Partnership (TPP) and the renegotiation of the North American Free Trade Agreement (NAFTA) as the US–Mexico–Canada Agreement. [...] Estimates found that the tariffs could have decreased total EU exports to the US by 8% in the long run and could result in a 0.1% loss in EU GDP because of declines in automobile exports and a 0.01% loss in GDP due to steel and aluminium tariffs (Felbermayr and Steininger, 2019). [...] It should refrain in particular from using the CBAM as a conduit for retaliatory trade measures as this would require an unrealistically high carbon price on the embodied emissions of US imports and could weaken the acceptability of the border carbon tax for the EU’s trade partners. [...] Sectorally, the main change is the large drop in the import share in the mining sector, largely driven by the resurgence of oil and gas production resulting from the shale gas revolution.