2024-11-06 14:16:00
The White House will once again be the residence of Donald Trump next January. This return of the Republican candidate for the presidency of the United States risks having concrete consequences for the Belgian and European economy. Trump plans in particular to increase customs duties on products imported into the United States, and his return to power could encourage American investments to the detriment of Europe.
The United States, Belgium’s fourth customer, imported more than 25 billion euros worth of Belgian products last year, including metals. However, Trump wants to impose an additional import tax. For example, if the customs duty on the American market reaches 10%, this will immediately make the Belgian product 10% more expensive compared to products manufactured locally in the United States, not subject to this tax. This difference could directly impact employment in Belgian companies with strong exposure to the American market.
Business competitiveness under threat
Other elements of Trump’s policy also threaten the competitiveness of Belgian companies. His desire to favor fossil fuels, reduce income and corporate taxes, as well as strengthen conditions favorable to production in the United States are all encouraging factors. If manufacturing becomes more attractive in the United States, with a more flexible labor market, reduced energy costs and increased subsidies, companies engaged in global markets could choose to locate their production sites across the Atlantic, to the detriment of Europe. This strategic choice could once again put jobs in Belgium at risk.
The question therefore remains to know what European response will be provided. The Walloon Act business federation calls for increased cooperation between European states to support innovation and strengthen the continent’s competitiveness.
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**Interview with Dr. Anne Marie Courtois, European Economic Analyst**
**Interviewer:** Thank you for joining us today, Dr. Courtois. With Donald Trump poised to return to the White House, what do you see as the immediate economic implications for Belgium and Europe?
**Dr. Courtois:** Thank you for having me. Trump’s proposed policies could indeed have significant effects. One of his key strategies is to increase customs duties on imports, which directly impacts trading nations like Belgium. Given that Belgium exported over 25 billion euros’ worth of goods to the U.S. last year, these tariffs could make Belgian products significantly more expensive in the American market.
**Interviewer:** You mentioned that if tariffs are increased, it could make Belgian products less competitive. Can you elaborate on that?
**Dr. Courtois:** Certainly. If, for example, customs duties on Belgian imports are raised to 10%, that would immediately put Belgian products at a disadvantage compared to similar products manufactured in the U.S., which would not incur those additional taxes. This could lead to decreased sales for Belgian companies, with potential knock-on effects for employment within those industries reliant on exports to the U.S.
**Interviewer:** What other aspects of Trump’s economic policy could threaten Belgian competitiveness?
**Dr. Courtois:** Trump’s inclination to favor fossil fuels and reduce both income and corporate taxes could make U.S. manufacturing much more attractive. With production costs potentially lower due to these tax cuts and a flexible labor market, companies may choose to relocate operations to the U.S. This could lead to a significant outflow of manufacturing jobs from Europe, especially in sectors where Belgium excels.
**Interviewer:** With these challenges, how should Belgian companies respond?
**Dr. Courtois:** They need to adapt strategically. This can mean diversifying their market base to reduce dependency on the U.S. and investing in innovation to improve efficiency. Additionally, they might consider lobbying for trade agreements that could offset some of the effects of U.S. tariffs. Collaboration at a European level could also help strengthen the negotiating position against unilateral tariff measures.
**Interviewer:** Thank you, Dr. Courtois. It’s clear that Trump’s return could reshape the economic landscape for Belgium and Europe.
**Dr. Courtois:** Absolutely. The coming months will be crucial as we watch how these policies unfold and their consequent impact on global trade dynamics. Thank you for having me.
