US tariff wars will inevitably lead to global recession - Latvian MEP

RIGA - The tariff wars started by the United States' new administration will inevitably lead to a global recession, European Parliament member Martins Stakis (Progressives) believes.

The MEP told LETA that he is baffled by the intellectual capacity of the new US administration, as all previous US presidents, starting with Ronald Reagan, have favored free trade. That is what has enabled the US to become the largest economy in the world. According to the MEP, no influential economist has recognized the US decision as a good idea.

"Each politician has four most important words - treat your allies well. What is happening now is the opposite. It is clear that it will not benefit Europe and the US. Instead, it will only benefit Russia and Belarus, which are not subject to tariffs, and other dictators who like this situation because they are isolated from others in terms of tariffs," said Stakis.

In his view, this demonstrates the dangerous consequences of populism. The MEP pointed out that populists are not interested in how their decisions will affect people. There are also supporters of US President Donald Trump in Latvia, Stakis noted.

"Whatever Trump does, the populists in Latvia applaud and justify the US President's actions. Europe, including Latvia, must learn from this situation - we must not let the little "Trumps" take power, because the consequences could be disastrous," the MEP warned.

Stakis believes that the US administration needs to be negotiated with, but there are not many people who believe that these negotiations will bring any good result. He pointed out that the only ones who can change the situation are the US people themselves in the next US presidential election.

As to how long it would take for the European Union (EU) to respond, the MEP pointed said the European Commission (EC) was already prepared, but was waiting to see whether the US would impose tariffs. In his view, since the US had announced the tariffs, the EC had every right to respond swiftly, as there was no need for a lengthy conciliation procedure.

Asked how the US tariffs will affect the European economy, Stakis said that it is not just about Europe - if a global recession were to start, it would affect everyone. The MEP projected that while investment will fall, Europe is committed to investing in areas such as defense, so Europe will probably suffer less, as there is a simultaneous move towards economic stimulus measures.

As reported, Trump has announced new tariffs on imports of goods from abroad, including high tariffs on China and the EU, important US trading partners.

The US will apply a 20 percent tariff on goods from the EU.