Of
Federico Fubini
Trump’s taxes average 12%, but so far little of what the president envisaged has worked: the fear of internal tensions is rising. While the EU aims to target goods produced with the emission of greenhouse gases
2025 was the year of American tariffs, but 2026 begins under the sign of the European ones. They will be different, more limited, designed to protect a collective good of the planet such as the climate and not to explicitly punish other countries. But they will arrive, starting the day after tomorrow: the Cbam, the English acronym for the “Carbon Border Adjustment Mechanism”, has been affecting the import of non-European products generated through the emission of greenhouse gases since January. For now it only concerns concrete, iron, steel, aluminum and fertilizer materials, plus electricity and hydrogen from third countries (the most affected will be China, Türkiye and India). The withdrawal, variable according to the polluting content, it weighs on around 100 billion euros of goods bought outside the European Union.
It’s not protectionism, in theory. The Cbam only seeks to impose on the global competitors of European companies the same taxes that they already suffer on their polluting production, decided to push them to reduce emissions. But at least in one respect the new tariff decided in Brussels resembles those of Donald Trump, because it increases costs for hundreds of thousands of companies. Screws, bolts and steel pieces imported from abroad for machinery made in Veneto or Bavaria will increase in price. Some of these companies could decide to move part of their production to China, Türkiye or India to save on components and tackle world markets from there.
This is where duties really risk to generate a heterogenesis of ends, as the president of the United States has begun to experiment in recent months. The increase in customs duties that began with “Liberation Day” on April 2nd (since then the effective average duty has risen from around 2% to around 12% on average) concerns less than half of consumer goods such as Italian wine; but otherwise Trump’s levies hit and make materials entering American industrial supply chains more expensive.
This is the failure of the relaunch plan of manufacturing in the United States is already starting to take shape. And 2026 promises to be the year it becomes evident. Observes Penny Naas, former Washington Department of Commerce official today at the German Marshall Fund: “For every 10,000 jobs we create in steel mills thanks to tariffs that have risen to 50%, we lose between 175 and 200,000 in manufacturing activities based on steel itself.”
The effects are already coming to light. Not only has industrial employment in the United States lost around 67,000 workers (out of over twelve million) since Trump returned to the White House; above all, manufacturing investments have reversed the continuous increase trend recorded in Joe Biden’s four-year term and after the first nine months of 2025 are down by almost 12% compared to a year ago. Entrepreneurs, for now, don’t seem encouraged from duties to bringing production back to America. Meanwhile, perhaps as early as January the Supreme Court could declare unconstitutional the president’s use of emergency powers with which he imposed tariffs by bypassing Congress.
Basically, almost nothing is going as the president had predicted nor as some of his critics had feared. In dollars, the New York S&P500 is the major stock market index that has gained the least among the thirteen main ones in the world. American inflation did not explode due to the tariffs – as was feared – but from “Liberation Day” onwards it started to rise again enough to induce Trump to withdraw some agricultural tariffs (particularly on Latin America). The tycoon fears that tariff increases on food goods will aggravate tensions over the cost of living and push some of his lower-income voters towards the Democrats. In 2026, as the mid-term elections approach, further reversals will probably arrive on tariffs linked to goods that are crucial for the domestic economy of millions of Americans.
The reaction of the rest of the world is also revealing very different from what Trump’s critics, in particular, feared. The response was not a repeat of the international crisis of 90 years ago. The protectionist crackdown of the Smoot-Hawley Act of 1930 led to tariff retaliation of dozens of countries against the United States and to a collapse of world trade. This time, however, other countries react differently to Trump’s grip: no retaliation, but trade agreements that are close or already in force between the European Union and Mercosur, between the EU and Mexico, between Great Britain and India and Canada’s rapprochement with China and Indonesia. The other countries isolate America and allow world trade to continue to grow while Trump slips away.
However, not everything goes in the best way. With the tariffs, China sees its exports to the United States collapse by 19% and unloads its excess production on Europe. Brussels is already retaliating against Beijing with protective tariffs on batteries, electric cars, steel components, tires and various other products. Just in the last few days the Chinese retaliation against our cheeses has arrived. 2026 could be the year of growing commercial tension between Beijing and Brussels.
December 29, 2025
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