American Tariffs and their Impact in the EU and Spain

Abstract

Donald Trump´s so called trade wars and the COVID-19 pandemic are likely to have a substantial impact on international trade flows and would probably reshape globalization. As trade is restricted by tariffs, global value chains are shortened and international cooperation becomes more difficult, there is a chance that environmental sustainability will increase due to lower and shorter trade flows. This paper tackles this issue by exploring the impact that recent American tariffs have had on the EU with a special focus in Spain. Using the SMART simulation model developed by the World Bank and the UNCTAD, we estimate the impact of the new tariffs applied to iron, steel and aluminum, the products included in the list of products affected by the Airbus dispute, as well as the potential new tariffs to the automotive sector. We end with a discussion on the effects of this new wave of protectionism on sustainability.

Keywords:

trade policy, protectionism, trade war, Europe, Spain