What are punitive tariffs with which Donald Trump is constantly threatening?

“America First” – the USA first. US President Donald Trump has announced penalty tariffs of 25 percent on auto imports from abroad. This is a potentially difficult blow for German carmakers. The tariffs should apply to all cars that have not been produced in the United States and come into force on April 2, Trump said in the White House on Wednesday. “If they were manufactured in the USA, there is absolutely no tariffs.” Read more here.

Trump has announced or put a number of tariffs since he took office in January. Since March 12, new US tariffs of 25 percent on steel and aluminum imports apply. The right -wing populist also imposed punitive tariffs against the rival China. China is the country with which the United States have the greatest trade deficit.

The procedure of the US president increases fears before a global trade war with devastating economic effects.

Customs are levies that are charged when importing goods. There is also talk of protection or punitive tariffs, which is always in the eye of the viewer. Those who impose the tariffs speaks more of protective tariffs that protect their own economy or security. The injured party speaks more of punitive tariffs because he feels punished as a competitor.

This is precisely why: they are supposed to protect domestic industries from foreign competition by making their goods more expensive. This damages the competitiveness of foreign goods on the domestic market.

The EU has been raising extracols on electric cars from China since the end of October 2024. The European Commission wants to secure the future of the auto industry in the EU. In an investigation, she came to the conclusion that Chinese manufacturers benefit from unfair subsidies that give them a significant advantage on the European market.

Customs can also be incurred when exporting from a state or economic area, then one speaks of export tariffs. You can serve as a source of income for a state or to limit the export of coveted goods abroad. Free trade agreements are funds to reduce tariffs and other commercial barriers, for example in the planned agreement between the EU and the South American Economic Alliance Mercosur.

Topes keep imports from goods from other countries away from their own, protected market. This can reduce the sales opportunities of goods from third countries and hinder the structure of industries there.

In addition, tariffs are more expensive. Bundesbank President Joachim Nagel warned of Trump’s customs plans and described them as a possible “turning point for the international trade order”. Affected countries could use retaliation. Customs increases would make consumption more expensive and inflation, warned Nagel. “That makes us all poorer.”

And Simone Menne, President of the American Chamber of Commerce in Germany (Amcham Germany), points out that high import duties Trump and the US economy would harm itself. “Then prices in the USA would increase, inflation increased and the dollar rated more, which makes US exports more expensive.”

The WTO is not an authority that watches the legality of tariffs. Rather, the 166 member countries now monitor each other.

WTO members like the USA make promises when you join and cannot simply increase tariffs afterwards, unless your national security would be threatened. In the WTO, the principle of the most favorable applies. This means that a customs set that is granted to another country is also entitled to everyone else. Exceptions apply, for example, to free trade agreements or to developing countries.

If a WTO member raises punitive tariffs, affected countries can complain. With reference to national security, the USA 2018, for example, raised 25 percent tariffs to steel products and aluminum in Trump’s first term. Several states complained. The WTO arbitral tribunal agreed to them in 2022 and declared the tariffs to be ill. Then tariffs have to be adjusted or winners can claim their losses.

However, the United States went to appeal. Only for many years they have blocked the new appointment of the appellate body to enforce reform claims. That is why the instance does not work and the case hangs in the air.