The postponement of US tariffs on Canada and Mexico and the start of a new trade deal between the US and China is a leading topic in the Western press today, BTA reports.
US President Donald Trump has postponed planned tariffs on Canada and Mexico for 30 days, after the two countries pledged to take measures to stop the flow of drugs and migrants to the US. At the same time, 10% tariffs on China came into effect today at 00:01 US Eastern Time (07:01 Bulgarian Time). In response to the new customs tariffs introduced by the US, China announced that it would impose duties on imports of US liquefied natural gas, coal and agricultural equipment from February 10, as well as that it would launch an antitrust investigation against "Google", the newspaper reports. "Financial Times".
This marks the beginning of a second round of the trade war that began during Trump's first term, the newspaper notes.
Trump warned that these tariffs on Chinese goods are only "the opening blow" and added that within the next 24 hours he will probably talk with Chinese President Xi Jinping on various controversial issues, writes the "New York Times". Many Chinese goods are already subject to 10- or 25-percent tariffs. The new 10-percent tariffs will further increase the prices of goods worth more than $400 billion that Americans buy from China every year, the publication states.
"The New York Times" also focuses on the postponement of planned tariffs on Canada and Mexico. Wall Street analysts took the Trump administration's willingness to impose a 10 percent tariff on Canadian energy imports from 25 percent as a positive sign. The agreement to postpone tariffs on Mexico also suggests the US president is willing to back down, the publication notes.
The chaotic last-minute maneuvers showed Trump's willingness to use tariffs as leverage to pressure the US's most important trading partners despite the potentially severe economic consequences, the "New York Times" commented.
Imports from Mexico, China and Canada account for more than a third of goods imported into the US, with a combined value of more than $1 trillion a year. Economists predict that the tariffs and expected retaliation could increase inflation and disrupt global supply chains, the "New York Times" also writes.
In an interview with CNBC, the president of the Federal Reserve Bank of Boston, Susan Collins, said yesterday that the "broad-ranging" tariffs would raise the prices not only of so-called final goods, but also of "intermediate goods" that are used to produce other products. However, Collins said that for now "there is no urgent need" for the Federal Reserve to cut interest rates, the "New York Times" adds.
The US dollar rose yesterday as investors predicted that the US Federal Reserve would be forced to keep interest rates higher for a longer period, the British newspaper "Guardian" writes. If Trump were to declare a trade war with more countries and they retaliate, it could have wider global inflationary implications and weigh on global growth, the paper warns.
The British think tank National Institute for Economic and Social Research estimates that a 10% tariff on all US imports - with retaliatory measures from trading partners - could reduce global growth by about 1% over the next two years.
Growth in the UK could also fall by up to 0.7% in the first year, while inflation would be 3 to 4% higher and interest rates 2 to 3%.
However, tariffs could also have a disinflationary effect depending on how the trade war unfolds. Weaker global growth could dampen inflationary pressures. Some economists say the huge US tariffs on China alone could lead to lower prices in other countries as Chinese companies could respond by trying to find alternative buyers.
W. "The Wall Street Journal" published an article focusing on the EU's preparations for a possible EU-US trade war.
European leaders gathered in Brussels on Monday for a planned meeting to discuss military spending - a hot topic for Trump. They generally played down the prospect of counter-tariffs or similar retaliatory measures, the publication notes.
On Sunday, Trump again focused on Europe's long-running trade surplus with the United States, which he said was more than $300 billion. But the volume of trade pales in comparison to the value of transatlantic investment. Each country accounts for more than 60 percent of all foreign direct investment in the other's economy, the Wall Street Journal reported.
Trump's pressure comes at a particularly difficult time for Europe. The bloc's statistics office said the EU economy grew by just 0.8 percent last year. The U.S. economy grew 2.8 percent last year, according to data from the U.S. Commerce Department, cited by the Wall Street Journal.
Officials from the European Union, which generally advocates free trade, have been devising ways to respond to U.S. threats of tariffs for months, the paper said. European officials have also spoken with their counterparts from Canada, which has a free trade agreement with the EU. Canadian Prime Minister Justin Trudeau spoke with European Council President Antonio Costa on Sunday, seeking ways to cooperate against U.S. pressure.
"We are prepared," Finnish Prime Minister Petteri Orpo said yesterday, but declined to give details of the EU's readiness. "I will not start a war. "I want to start negotiations," Orpo emphasized, quoted by the "Wall Street Journal."
However, the question of whether Trump wants negotiations continues to weigh on Europe, the American newspaper concludes.