Now that the dust is beginning to settle after the US presidential election, its global trading partners are starting to look for some clarity around quite what the future holds for those wishing to export to America.
In late September, Donald Trump fired a direct shot at John Deere, threatening the company with a 200% tariff on models produced in Mexico if the company continued to shift production there.
This pronouncement caught the headlines, as was probably intended, and underlined the determination with which a Republican administration would seek to stop the flight of American industry to foreign countries.
Big brands under fire
John Deere is not the only iconic American brand to feel his wrath, Harley Davidson was singled out for declaring that it was going to move production out of America of all motorcycles that were destined for Europe.
That was back in 2018, during Trump’s first term in office, and was part of a ‘tit for tat’ trade skirmish with the EU over aluminium and steel imports, yet the company did go ahead and open a plant in Thailand and has now taken the step of importing some of these machines back into America.
We will have to wait until after Trump’s inauguration to find out if he intends to respond to this developing stand-off between American industry and the new administration – a confrontation which is causing some anxiety in Europe.
Tariff worries at EIMA
At last week’s EIMA show in Italy, there was a conference called to discuss what the result might mean to the European agricultural industry, both farmers and the supply trade.
There were three general areas of concern discussed by the speakers that included MEPs and leaders from Italian industry, the first being the divergence of opinion on environmental issues.
Donald Trump has indicated that he is not as swayed by the climate change alarmists as was the Biden administration or the EU, going so far as to call it a hoax, although he has since pointed out that the change is real, it is the cause that is open to question.
The EU on the other hand has set its course on the Green Deal, which is intended to make Europe carbon neutral by 2050, a target which will require less reliance on fossil fuels.
America will have many fewer qualms about continuing to rely on LNG and shale oil to power its industry and lifestyle with lower energy costs.
Division of Europe
The second issue that has caused consternation is that of selective tariffs.
Trump has given plenty of notice that he intends to bring back industry and commerce to America, an intention that is encapsulated in the nebulous term, ‘MAGA’, or ‘Make America Great Again’.
The worry at EIMA was that tariffs would be applied selectively to particular countries rather than EU products as a whole, raising tensions between EU members if one country was favoured or penalised more than another.
The plea from the speakers was that Europe must stand united in the face of such disruptive tactics, yet should such a situation arise it may prove difficult to keep the 27 members in line when one member is excused a tariff applied to others.
Technology block by tariff
A third concern aired was that the technology, both mechanical and digital, that is part and parcel of European machinery, will be barred from the American market through a keenly targeted tariff.
The lead that Europe has in this sphere will be of little advantage if it does not have access to international markets, it was argued.
There was little positive to say as the speakers from Italian industry and commerce voiced their worries, and certainly no mention was made of the likely resolution of hostilities in Ukraine which will open up Russia again, once an important and growing market for European manufacturers.