Washington [US], February 4: Although asserting that the final result will be "worth the price", US President Donald Trump also admitted that the current trade war will cause the country "a little pain".
Yesterday (February 3), US media quoted President Trump as saying that the tax increase could apply to the European Union (EU), and even the UK.
Trade war fears spread
Specifically, Mr. Trump said that both the EU and the UK were acting "inappropriately", but the EU was behaving worse and that raising tariffs on the bloc could be implemented soon.
The "inappropriate" action was explained by him as: "They don't import our cars, they don't import our agricultural products, they hardly buy anything, while the US has to import a lot of things from Europe. That's millions of cars and a large amount of food and agricultural products." Therefore, the owner of the White House, although not mentioning a specific time, emphasized that he would "quite soon" increase tariffs on Europe .
On the British side, Mr. Trump appeared more friendly when he said: "You are crossing the line, but I think it can still be resolved." He meant to imply that Washington and London can still negotiate with each other, especially when he added that he "has a good relationship" with British Prime Minister Keir Starmer.
Mr. Trump's statements were made in the context of the US just starting a trade war with Canada, Mexico and China by increasing tariffs on goods from these three countries. Therefore, observers are concerned that the trade war started by the US could spread and become more tense as the parties "retaliate".
Meanwhile, answering Thanh Nien , Dr. Zack Cooper (expert on US strategy in Asia, American Enterprise Institute - AEI) commented that some officials as well as those who have influence in the White House will restrain the escalation of the trade war, especially between Washington and Beijing. Mr. Cooper pointed out that while there are officials such as Secretary of State Marco Rubio or National Security Advisor Mike Waltz who tend to be "hawkish" about policy towards Beijing, on the contrary, billionaire Elon Musk, who has a lot of influence with Mr. Trump, is doing a lot of business with China, and at the same time has the view of "seeking dialogue".
In fact, US Treasury Secretary Scott Bessent is a proponent of tariffs but sees them as a means of negotiation, to be used only as a last resort. In other words, Bessent wants to "talk" rather than "fight".
Immediate consequences
However, even at the current level of the trade war, the US is actually "paying the price". Writing on the social network Truth Social, Mr. Trump admitted: "It will be a little painful. Yes, maybe (and maybe not!)... But we will make America great again, and it will all be worth it."
In fact, Canada and Mexico are the two largest suppliers of crude oil to the US. According to recent statistics, Canada and Mexico supply more than 3.8 million and 457,000 barrels of oil to the US each day, respectively. The amount of oil supplied by these two countries accounts for more than 70% of the crude oil imported by the US. This seems to be the reason why the US only increased the tax by 10% on Canadian crude oil, not 25% like other goods. However, this increase still has a strong impact on goods in the US market. Or Mexico is also the place that produces many types of cars for the US market, so it is estimated that car prices will increase by an average of about 3,000 USD/car in the US after this tax increase. Not only that, Canada and Mexico also supply many types of basic consumer goods to the US.
Of course, President Trump has maintained that the tariffs are necessary to address major concerns, including the trade deficit, illegal immigration, and the flow of illegal drugs. He has cited that the import tariffs he imposed during his first term did not lead to inflation.
However, according to statistics, Mr. Trump's tax increase policy in his first term only affected about 380 billion USD worth of goods, but this time it is 1,400 billion USD. Moreover, the US economy has just experienced a record inflation and the inflation rate has only recently cooled down. CNN quoted Mr. Gregory Daco, Chief Economist - EY-Parthenon Strategy Consulting Company (part of Ernst & Young Group), predicting that the consequences of the trade war could cause US economic growth in 2025 and 2026 to decrease by 1.5 and 2.1 percentage points, respectively.
Not only that, analysts are concerned that the US Federal Reserve (Fed) may temporarily stop the trend of lowering the basic interest rate that has been going on recently to prevent inflation risks. In fact, the trade war caused many Asian stock markets to fall on February 3.
Source: Thanh Nien Newspaper