‘Donald Trump’s 25% steel tariffs don’t acknowledge carbon’s social cost — for that, he’d first need to admit climate change is real’
Gernot Wagner is a climate economist at Columbia Business School. Speaking to Srijana Mitra Das, he discusses Donald Trump’s tariff measures — and what these mean in our era of global warming:
Q. How will Donald Trump’s proposed tariffs impact the US economy?
A. First, across-the-board tariffs are usually costly to businesses with global supply chains, to consumers, etc. Some supply chains might benefit while others won’t but, on average, tariffs cost a lot. They have larger effects than politicians often assume — Donald Trump might think, tariffs aren’t a tax on Americans and so, they won’t cost them. That is not the case.
How will the US-China tariff tension likely play out?
US tariffs on China will have a fairly sizeable impact, particularly on the low-carbon transition — China is the world’s largest exporter of several inputs and final products in supply chains which are instrumental in the clean energy transition, from solar panels to wind turbines and electric vehicles (EVs). So, the tariffs will be quite disruptive. Then, the Chinese response leads us to a real danger of an actual trade war, a beggar-thy-neighbour set of policies where each country will slap tariffs on the other, with no true winner in sight.
What role could the European Union (EU) play here?
Frankly, the EU could, in part, be a beneficiary — China will want to sell some products which won’t reach the American market as much. So, European consumers could benefit from that while European policy makers might get more worried about the
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