Fresh Tariff Threats Embolden Retaliation Hawks

Fresh tariff threats on several of the largest U.S. trading partners run the risk of strengthening the arguments of those in foreign capitals pushing for retaliation, former trade officials say.

President Donald Trump has issued a new spate of tariff threats in letters sent to U.S. trade partners over the last week, with economies like Brazil, Canada, Mexico and the European Union facing significant tariff hikes come Aug. 1.

Daniel Mullaney, a former U.S. trade official, told Agri-Pulse that moving the goalposts as the U.S. and EU were closing in on a deal gives “ammunition” to EU voices pushing for retaliation.

“This will probably help arm those who say, ‘Look, we’ve got to take some other strong actions,’” Mullaney said. “It could upset the apple cart in that way.”

The EU has delayed a package of retaliatory tariffs that was set to kick in this week. But some in the bloc, including Bernd Lange, who chairs a top parliamentary trade panel, have argued that the time for retaliation is imminent.

“It’s a threat that can potentially hurt,” Cecilia Malmström, a former EU trade commissioner, said of Trump’s latest tariff hike.

If there is no deal with the U.S. to ease tariffs by Aug. 1, Malmström expects the EU to impose two sets of retaliatory tariffs – a previously approved package covering around $23 billion worth of U.S. goods, including soybeans and corn, and a second package currently under consideration hitting $84 billion in U.S. exports.

Mullaney, who is now a nonresident senior fellow at the Atlantic Council think tank, said the Aug. 1 deadline could still prove flexible, as with many of the president’s previous tariff deadlines.

If discussions are still progressing toward a deal, Mullaney said he would expect the president to consider some grace period.

“There could be an extension under that circumstance,” Mullaney said, but “if you’re just sort of sitting tight and hoping that the president just delays it again, that may be a misplaced hope.”

This article was originally published by Agri-Pulse. Agri-Pulse is a trusted source in Washington, D.C., with the largest editorial team focused on food and farm policy coverage.