US president-elect Donald Trump has made a series of appointments and is laying the groundwork for the potential implementation of a host of fresh tariffs on imports.
Trump has reportedly selected lawyer Robert Lighthizer to lead his administration’s approach to trade.
Lighthizer has already circulated memos setting out the incoming administration’s plans, Politico reports. He has also been in conversations with members of the US Congress about increasing tariffs through legislation, which the US government has not done since 1930.
The plans under discussion include the renewal of US$4.6trn in tax cuts, as part of a package aimed at moving production to the US. One person familiar with the discussions between Trump’s advisers and Congress told Politico that the focus would be on “raising revenue through tariffs on imports and taking [those] savings and using [them] to cut taxes and create incentives for domestic production”.
UK effect
A former economist at the Bank of England, Andy Haldane, has said that the UK has an opportunity to strike a trade deal with the US following Trump’s success at the election, according to the Guardian.
Haldane suggested that Sir Keir Starmer’s new Labour government can use the former president’s return as an opportunity to demonstrate the UK is “open for business at a time when so much else of the world is looking inward – whether to the EU, or the US, it could really pay dividends”.
He added that pursuing a US trade deal while also improving the trading relationship with other European nations is an opportunity unique to the UK following Brexit.
“It would have been impossible to have that conversation before. At least now we can commence that conversation. I’d really love if we could do something on both sides.
“Of course we should pursue energetically an improved deal with the EU, although that won’t be straightforward. The new government committed to that and should keep on committing to that.
“That should not, though, preclude – and does not preclude, as difficult as it will be – seeking out a free trade arrangement with the US under a new Trump presidency.”
EU reaction continues
The formulation of the European response to Trump’s win has also continued this week. Euronews notes remarks from Luxembourg’s prime minister, Luc Frieden, which suggested that it remained to be seen “whether he will apply everything that he has said during the election campaign,” adding that the exact shape of the measures Trump is likely to take is “still very vague”.
“So let's talk to him, let's listen to him, and then we need to adapt with a strong European collective answer.”
Kaja Kallas, set to be the next EU policy chief, has emphasised her view that the US should not isolate itself from the rest of the world.
"Isolationism has never worked well for America. My intention is that Europe is around those tables when anything about Europe is discussed, that we're not left out, that we have a say.”
Jean-Claude Juncker, meanwhile, told Politico that the EU’s relationship with the US is already at a low, saying “I can’t imagine it getting any worse” after Trump assumes office at a recent appearance. Though he was called “nasty” and a “brutal killer” by Trump in the past, Juncker has also been praised by the former president as a “very good man” and a “great businessman”.
Testing their metal
There may be a test for the EU’s approach to the incoming administration after a US official said the EU should postpone plans to impose higher tariffs on its imports of US steel set for March 2025.
The FT reports that a dispute over steel tariffs frozen under the current Democrat administration is set to resume, after it started under the first Trump government.
Rufino Hurtado, senior trade representative at the US mission to the EU, said:
“The Commission really has to make a choice — March 2025 is not long after the inauguration.
“It is entirely up to the EU to decide what happens in 2025 regarding these retaliatory tariffs — whether to again extend the suspension or allow them to snap back.”