Reference News Network July 16 report: Germany's "Handelsblatt" website published an article titled "Three Reasons Why Trump Is Escalating Tariff Disputes" on July 13. The authors are Jacob Hank Vila, Annette Mairitz, and Lauren Mayer. The following is a compilation of the article content:

US President Trump has further escalated his radical trade policies. On the 12th, he threatened to impose 30% tariffs on imports from the EU and Mexico. After weeks of negotiations that have yielded no results, Trump clearly has lost patience. The new tariff measures will intensify global trade conflicts, not only harming relations between the US and its close allies, but also shaking investor confidence.

Although the August 1st deadline gives the EU and many other affected countries time to negotiate agreements that could reduce tariffs, recent developments indicate that Trump has resumed his confrontational approach that he briefly set aside in April. Unlike in spring, Trump now has a stable market, strong economic data, and growing tariff revenue as a backing.

This also explains why the new tariff "warning letters" sent by Trump to 25 countries and regions have become increasingly severe in tone. For the EU, the 30% tariff that may be imposed on its goods is higher than the 20% rate Trump threatened to impose in April.

Why is Trump taking such aggressive measures? What are his motives? Here are three aspects of analysis:

1. The Trump administration believes its strategy is working

Trump adopts an escalation strategy in trade disputes, even accepting some damage to the US economy. For months, he has continuously switched between announcing new measures, suspending, and increasing tariffs, increasing uncertainty for businesses that rely on predictable trade relations. However, Trump continues to stick to his line.

Although tariffs increase the burden on consumers and businesses, they bring huge additional revenue to the US government: over $100 billion so far this fiscal year, up 86% compared to the same period last year.

June alone brought in $27 billion, a record high. This stabilizes the financial situation and serves as evidence for Trump to prove the economic viability of his policy.

The diplomatic cost of the tariff policy is high: allies such as Japan, Canada, and the EU have considered finding other arms suppliers or decoupling strategically from Washington. Despite this, Trump shows no sign of easing his policy, instead sending signals that no one is exempt.

The core reason for Trump's continued pressure is his confidence in the resilience of his strategy at the domestic political level. The US economy has remained strong so far, with the stock market setting new highs. The White House believes this proves the policy is effective and provides space for the president. The president is convinced that he is on the right path economically and politically.

However, during the market crash in early spring, Trump withdrew the planned tariffs within 24 hours. This indicates that he does face pressure and wants to avoid a complete collapse.

2. Trump faces firm resistance from multiple countries

Despite continuous threats to implement and indeed implementing new tariffs, Trump has failed to reach new trade agreements with major partners so far. His bold promise of achieving 90 agreements in 90 days has largely fallen flat.

Currently, the US has only reached vague framework agreements with countries like the UK and Vietnam, rather than comprehensive agreements. This indicates that Trump's strategy of using economic pressure for a quick victory has encountered unexpectedly strong resistance.

Although the US economic strength is undeniable - the EU's exports to the US exceeded $553 billion in 2022, and bilateral trade volume approached $1 trillion in 2024. But even under these conditions, Europe has shown surprising determination.

This is partly due to Trump's extortionate tone - such as demanding full market access with zero tariffs from the EU, and more fundamentally, a lack of trust. Many governments suspect whether the agreements reached with Trump are reliable, and the fear that Washington might revoke them at any time has weakened the willingness to negotiate.

So far, the EU has been particularly firm in the two key areas of agriculture and automobiles. According to reports, the US government proposed a 17% tariff on EU agricultural products - which the EU considers too high. According to a previous report by Bloomberg, the EU believes agricultural product tariffs should not exceed 10%.

The automobile tariff negotiations seem more complicated. Since early April, the US has imposed an additional 25% tax on cars on top of the existing 2.5% rate, and since early May, it has extended this to car parts. Given the heavy burden on the automotive industry, the EU insists on requiring extensive special rules.

Other US partners also face domestic political pressure: the opposition Democratic Party won the presidential election in June, and making trade concessions to the US was not feasible during the campaign; and Japan is about to hold a Senate election, and the government is also unwilling to take risks. As a result, both countries have stood firm on core issues such as agricultural and auto exports.

After three months of trade war, the preliminary conclusion is that Trump's calculation of "overcoming minimal resistance with maximum pressure" has largely failed. But instead of prompting the president to change his strategy, this has stimulated him to issue more and harsher threats.

3. Using tariffs as a global power lever

Trump is increasingly using punitive tariffs as a tool to achieve foreign policy goals beyond traditional trade issues. He threatened Brazil that if it did not withdraw the criminal charges against former president Jair Bolsonaro, it would face a 50% tariff on its goods - a move attempting to intervene in ongoing judicial procedures through economic pressure.

Mexico was hit with punitive tariffs for failing to effectively combat fentanyl smuggling. As for the EU, Trump disapproves of regulating and taxing digital companies, as these practices mainly affect American tech giants.

Matthew Bay, senior global analyst at Stratfor, said that the US's global partners will have to get used to being constantly taxed and pressured. "Even if Trump signs multiple trade agreements, he will continue to frequently use the tariff tool to benefit the US in trade and non-trade areas." (Translation/焦宇)

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