Why even tariffs?

Donald Trump, President of the United States of America has proclaimed his intention to establish import tariffs on certain goods, such as aluminum and steel. His explanation as for the cause of these tariffs was "to preserve national security" and because the USA has been treated "unfairly" by countries such as Germany or China.

While the former seems to be questionable, the latter argument has some merit to it. The European Union, which Germany is a part of, has itself quite high import tariffs, in some cases much higher than those of the United States. For private cars, for example, the tariff for importing into the US is 2.5% , while the EU charges 10% . This is a massive disadvantage for the american car industry, one which could have been negated, had negotiations about TTIP not broken down. As it currently stands, however, the US is right in demanding better, or rather equal, conditions.

These tariffs are not the solution

The decision by Trump to put tariffs on these specific goods are not helpful to the US. First of all, a big portion of aluminum and steel imports by the US come from Canada and Mexico, while the EU plays a rather low role in these industries. If Trump is trying to get better conditions for american exports, this is at most an attempt to intimidate the EU. The biggest problem of these tariffs is their impact on americans. While it would make sense in regards to american companies to tax certain consumer goods such as cars or electronic devices that are made by corporations which are in competition with american counterparts, this is not the case for ressources such as those affected. The tariffs will only lead to a decrease in supply and therefore a price hike within america for which american corporations and therefore the consumers will have to pay. Meanwhile, outside of America, the price will drop, which helps out the industries dependent on them, but not in America. Other countries will therefore not be hurt by the tariffs nearly as much as americans. The only ones who profit are American steel and aluminum manufacturers, who will struggle to meet demand and increase prices as well as ramp up production ( benefiting american workers in these industries ). How long Trump will keep the tariffs up is, however, a very big factor in determining how much american workers profit, because if its just a short while, prices will bounce back down and may drop even lower than before due to increased overall supply worldwide. Additionally, while they are in effect, prices of consumer products will increase.

The possibility of a trade war

Judging from Trump's recent rhetoric as well as that of the EU, there is a possibility of a trade war breaking out between the two. The EU would be hurt quite a bit, seeing how the countries in the EU, especially seeing as to how countries like germany, about which Trump has been complaining for a long time now, export a high amount of their goods to america. The problem with a trade war lies in the fact that no one would profit and the economy of all states involved would suffer greatly due to the sheer amount of trade happening between them.

In an ideal scenario, the differences in import tariffs between america and the other states can be compensated, ideally more towards the lower tariffs, and a trade war be avoided. The full consequences of an all-out trade war, as unlikely as one would be are can not easily, if at all, be grasped.