Of all the arguments for protectionism, the infant industry argument probably has the strongest theoretical appeal. By protecting a new industry from its more developed foreign competition, the story goes, tariffs give domestic producers the time to grow, learn, and become efficient enough to stand on their own. Domestic consumers feel the short-term pains of higher prices, but they enjoy the long-term gains of job growth and lower prices as the new industry blossoms.
It's no secret that tariffs have driven significant price increases over the last year and a half. A study from the New York Federal Reserve finds that tariffs "contributed 2.9 percentage points to goods price inflation" and that without tariffs those prices would have slightly declined. Tariff defenders, looking for a new reason to claim these higher prices are only temporary, have reimagined the infant industry argument. Now it's being used to support trade barriers in industries that are over a century old, but the promise is exactly the same: Domestic firms need the protection so they can compete, innovate, and cut costs until prices come back down even further than they were before the tariffs.
Michael Brendan Dougherty recently made such an argument in National Review, arguing that "tariffs can, over time, bring prices below where they started." When economist Don Boudreaux called the argument "bizarre," Dougherty replied that critics had failed to acknowledge the dynamic process by which markets respond to tariffs "by adapting and cutting costs." Although he is light on specific details, he posits that the changed incentives of a "paradigm shift" in tariff policy will spur domestic competition, leading to the theorized price reduction. Of course, firms would still respond to the dynamic processes of domestic competition without a tariff wall, but the point stands.
From there, the reworked infant industry argument becomes the standard version advanced more than two centuries ago by Alexander Hamilton and his disciple Friedrich List. When Hamilton made this claim in 1791, his argument may have seemed suitable for a new nation seeking to firm up its economy and security against established European powers.
Others at the time pointed out that special interest groups—a manifestation of the "violence of faction" so thoroughly dissected in the Federalist Papers—had already begun to coalesce around the fledgling iron industry in Pennsylvania, clamoring for protective tariffs. Two years earlier, James Madison had warned about a "premature policy of stimulating manufactures" driving tariffs too high. In the end, Hamilton recommended and Congress enacted a far more moderate tariff schedule than his theoretical musings portended. American iron manufacturers received a consolation prize of a higher tariff on their competitors than the rate for most general imports. Hamiltonians have been touting the infant industry argument ever since.
Nearly 250 years later, those same infants apparently have yet to advance into adulthood. Steel, the direct successor to the founding-era iron manufacturers, remains a singular focus of President Donald Trump's protectionist tariff policies, just as it was under former President Joe Biden. And former President George W. Bush before him. Indeed, steel has been a recurring beneficiary of protectionism for most of America's existence.
This extended period of protectionist infancy suggests that the argument needs a new name. We propose the "Peter Pan industry argument" for companies that never grow up because tariffs make sure they never have to.
The question tariff advocates rarely ask is: Why do some American producers have higher costs than foreign rivals even in the face of lower-cost foreign competition? The answer comes down to specific rules and choices within particular firms and industries. Tariffs, and protectionism in general, address none of these. No industry illustrates this like steel, but it is far from the only one.
In 1947, United Steelworkers won a contract provision known as Section 2-B. Among other things, this barred mill managers from changing established work practices unless new technology required it. Steel companies tried to get rid of this in 1959, finding it difficult (given union incentives) to establish that technology required change. In response, 500,000 steelworkers went on strike for 116 days. This strike sent buyers abroad, causing 1959 to be the first year the U.S. imported more steel than it exported. One of the then-new technologies that was delayed was basic oxygen furnaces, which could produce steel far faster and cheaper than the open-hearth furnaces that were so common. In 1965, only about 17 percent of steel made in the U.S. was made using the basic oxygen furnace. Japan produced 55 percent of its steel with this faster, more efficient method.
Change finally came from a steel customer. Vulcraft, a maker of steel joists, grew tired of paying Big Steel's prices and waiting for Big Steel's deliveries. In 1969, free from steel unions and preconceived notions, the company looked for new steel-producing technologies and found the answer in the electric arc furnaces that had been adopted in much of the world throughout the 1950s and '60s. Vulcraft's parent company later renamed itself Nucor, and minimills like the ones it pioneered now make most of America's steel.
So the modern steel industry was built by a frustrated steel buyer who found a way around protected companies. In other words, the U.S. steel industry has lagged behind the technologies found around the world.
We could go on, but the broad point here is that the "relatively higher domestic production costs that made the tariff 'necessary' in the first place," as one critic put it, are often the result of preventing competition in the first place. It's odd to suggest that further preventing competition through tariffs will somehow alleviate the ills of already-prevented competition.
Tariff advocates fail to acknowledge that the ability to import steel also comes with the benefit of access to cheaper steel for steel-using industries, such as manufacturing. A 50 percent tariff on steel further closes the release valve that imported steel offers. Buyers of steel are then left to purchase more of the more expensive domestic steel. Because new steel mills take years to bring online, this causes delays and longer delivery times for manufacturers.
We don't have to wonder what happens when a country lowers its tariffs on materials used by manufacturers. India did this in the '90s, and researchers found that newly available inputs accounted for 31 percent of the new products that Indian manufacturers introduced. And what happens when the U.S. imposes tariffs on steel? Downstream U.S. firms become less competitive. This is why American businesses clamor for exemptions to tariffs, especially for tariffs on materials like steel.
Perhaps all this could be forgiven if tariffs advanced national security concerns, as tariff advocates assert. They point out that an adversarial nation could cut off supplies of critical materials during wartime and cripple America's ability to defend itself. Unfortunately, tariffs fail there too.
First, this conflates production with access. While domestic production does ensure domestic access, access can be secured without production. In the case of steel, the Commerce Department reports that in 2025, the U.S. imported steel from 79 countries, with Canada being our top foreign supplier. The top 10 sources of steel are responsible for 77.8 percent of America's steel imports. None of those countries were considered adversaries—at least not until the tariff crusades pushed these friends away. What's more, according to the American Iron and Steel Institute, only 23 percent of finished steel in the U.S. was imported in 2024. Far from being exposed to foreign states' whims, American access to steel is incredibly resilient.
Second, this view ignores the positive effects of trade and globalization on national security. The Center for Strategic & International Studies finds that increased trade between countries reduces the likelihood that they'll go to war against one another. Globalization helps ensure that domestic access continues unabated should war break out, thanks to the diversity of trading partners.
When Hamilton made the infant industry argument, he at least assured us that the industry would at some point advance to adulthood and stand on its own. Steel, like so many other Peter Pan industries, has proven Madison right. These industries have refused to grow up, and it's time to stop pretending that tariffs will fix that.
The post Peter Pan Tariffs for Companies That Never Grow Up appeared first on Reason Magazine.
Last July, President Donald Trump imposed 50 percent tariffs on various Canadian goods, a list he subsequently expanded to include additional imports, some of which he banned outright. His legal justification was Section 338 of the Smoot-Hawley Tariff Act, which Congress approved in 1930. Section 338 authorized tariffs in response to discriminatory trade practices. But in the 96 years since it was enacted, no president had ever used it to impose tariffs.
Why is that? According to a lawsuit that the Liberty Justice Center (LJC) filed on Tuesday in the U.S. Court of International Trade (CIT), the answer is clear: Section 338 was superseded by subsequent legislation that likewise targeted discriminatory trade barriers, beginning with the Reciprocal Trade Agreements Act of 1934 and culminating in Section 301 of the Trade Act of 1974. Section 301, the current remedy, includes requirements that Trump apparently sought to dodge by invoking Section 338 instead.
That maneuver is illegal, the LJC argues. "Congress already gave the executive branch a tool for responding to unfair foreign trade practices: Section 301, which requires an investigation, public comment and other safeguards," says Jeffrey M. Schwab, the LJC's director of litigation. "The administration cannot skip those protections by reaching for a 1930 statute that no president had ever used to impose a tariff."
Why not? "Where provisions in two acts are in irreconcilable conflict, the later act, to the extent of the conflict, constitutes an implied repeal of the earlier one," the lawsuit says. "Where a later act covers the whole subject of an earlier one and is clearly intended as a substitute, it operates similarly as a repeal. And a specific policy embodied in a later federal statute controls the construction of an earlier one even absent express amendment."
Even if Section 338 somehow survived congressional approval of contrary laws, the LJC adds, Trump's tariffs exceed the authority it grants. And if Trump's interpretation of Section 338 were correct, the lawsuit says, the provision would violate the nondelegation doctrine, which bars Congress from delegating its tariff power to the president without providing "an intelligible principle" to guide and constrain his exercise of it.
Trump's Section 338 tariffs, in short, are "the Administration's latest attempt to exercise, through a statute never designed for the purpose, the tariff power that the Constitution assigns to Congress." That pattern should be familiar by now.
Shortly after taking office in 2025, Trump claimed to have discovered a previously unnoticed delegation of extensive tariff authority in the International Emergency Economic Powers Act (IEEPA), a 1977 law that does not mention import taxes and had never been used to impose them. That claim was rejected by every court that considered it, and last February the Supreme Court ruled that IEEPA does not authorize tariffs at all.
Trump responded to that decision by immediately announcing similarly broad tariffs under Section 122 of the 1974 Trade Act, which addresses "fundamental international payments problems" caused by "serious United States balance-of-payments deficits." In May, the CIT ruled that the new tariffs were illegal because Trump had failed to "identify balance-of-payments deficits within the meaning of Section 122."
Trump then switched to Plan C, invoking Section 301 of the Trade Act, which authorizes tariffs in response to a foreign "act, policy, or practice" that is "unreasonable or discriminatory" and "burdens or restricts" U.S. commerce. He claimed that provision justified tariffs on 86 trading partners, accounting for nearly all U.S. imports, because they had failed to "impose and effectively enforce a prohibition on the importation of goods produced with forced labor." The CIT is currently weighing challenges to those tariffs, including an LJC lawsuit.
Trump's Section 338 tariffs have now added to the CIT's caseload. The LJC represents Gellert Global Group, an importer that was hit hard by those taxes after Trump added cheese to the list of disfavored Canadian goods. The lawsuit asks the CIT to certify a class of importers, numbering in "the hundreds, if not the thousands," that likewise have been clobbered by Trump's 50 percent tariffs.
Since Trump obviously is aware of Section 301, why did he resort to a never-used, seemingly obsolete provision to justify the tariffs on imports from Canada? As the LJC notes, Section 301 requires an investigation by the Office of the U.S. Trade Representative, "consultation with the foreign country concerned, notice, public comment, a hearing, and determinations within statutory deadlines." It also requires "that action be equivalent in value to the burden imposed, that duties be preferred over other import restrictions, and that actions terminate after four years absent a request for continuation and review."
Can Trump avoid those constraints by invoking Section 338 instead? The LJC thinks not: "Congress did not intend to leave in place a parallel authority that would allow the President to impose the same remedies, for the same conduct, free of every one of those safeguards."
Section 338 has been "impliedly repealed," the LJC argues. "At a minimum, Section 301 controls where, as here, the President seeks to respond to foreign practices within Section 301's scope, and the President may not impose duties in response to such practices while disregarding the procedures and limits Section 301 imposes. Because the President did not proceed under Section 301, the Section 338 Tariffs are unlawful whether or not Section 338 survives."
Even if you ignore subsequent legislation, the LJC argues, the Canadian policies that Trump cited when he announced the tariffs do not qualify as "discrimination" under Section 338. "Canada's motor vehicle surtax and its provinces' alcohol purchasing decisions are responses to tariffs that the United States imposed on Canada, not discrimination by Canada against the United States," it says. Trump also complained that Canada treats European cheese imports more favorably than U.S. cheese imports. But "when Congress enacted Section 338, a preference granted under a reciprocal agreement was not 'discrimination.'"
Section 338 "addresses discrimination: measures that single out United States commerce for worse treatment than the commerce of the world at large," the lawsuit says. "It is not a general authorization to impose tariffs whenever the President disagrees with a trading partner's policies, or whenever a trading partner responds to tariffs the United States has imposed on it."
Trump also was unfazed by Section 338's requirement that the president set duties to "offset" the costs imposed by discriminatory practices, which implies proportionality. Rather than attempt that, the LJC notes, Trump imposed "the statutory maximum rate of 50 percent without tying it to any measured burden."
As interpreted by Trump, the lawsuit warns, Section 338 authorizes the president to "impose tariffs of up to 50 percent on any products of any country that extends better treatment to any other country in any respect—including through any of the hundreds of preferential trade agreements to which the United States is not a party—or that responds to tariffs the United States has imposed on it." Yet Section 338 "contains no clear statement authorizing that power," contrary to the "major questions" doctrine, which applies to assertions of executive authority with "vast economic and political significance."
If Section 338 conferred the sort of unfettered authority that Trump is claiming, the LJC says, it "would supply no intelligible principle constraining the exercise of Congress's power to lay duties." His reading "would convert a narrow, fact-dependent provision into an effectively unrestricted delegation of Congress's tariff power," which would be "an unconstitutional delegation of legislative power."
This case "is not about the president," says LJC CEO Sara Albrecht. "It is about the presidency. No president should have the power to pull a dormant statute off the shelf and use it to impose sweeping tariffs or import bans without the limits Congress required."
The post Trump's 50% Tariffs on Canadian Goods Illegally Rely on a Superseded Statute, a Lawsuit Argues appeared first on Reason Magazine.
On Monday, the U.S. Department of Agriculture (USDA) announced it would "make $8 billion available for one-time payments to American farmers this harvest season to provide relief during temporary market disruptions and increased input costs."
Using a formula derived from the USDA's production, yield, and price estimates, the Harvest Fuel Relief program will "provide simple, proportional support to producers." It will only cover a "portion of modeled losses during the 2026 crop year." The Farm Service Agency—an office within the USDA that administers credit and loan programs—will administer the $8 billion in one-time payments using funds from the Commodity Credit Corporation, a federal entity authorized to draw up to $30 billion from the U.S. Treasury to fund agricultural initiatives. Payment rates won't be released until November, and the USDA's notice leaves open the possibility of additional payments for "non-Title I commodities, including specialty crop growers and fishermen."
A fiscally questionable decision, the program comes at a time when farmers are feeling a significant price pinch. The dyed diesel American farmers and ranchers use is exempt from state and federal highway taxes, but that has done little to offset skyrocketing fuel prices. In September, the American Farm Bureau Federation projected that fuel expenses would reach $22 billion this year, up 29 percent from 2025. The Farm Bureau estimates that total production expenses will reach nearly $500 billion in 2026. According to its own predictions, the USDA doesn't expect the situation to improve anytime soon.
In its latest Commodity Costs and Returns report, released in June, the USDA projects farmers and ranchers will face record production costs in 2027—higher than during the COVID-19 supply chain disruptions—driven by higher prices for necessary inputs such as fuel, fertilizer, seeds, machinery, and labor.
While the USDA has blamed "temporary market disruptions" for these cost hikes, the blame more accurately falls to President Donald Trump, thanks to his illegal war in Iran. As of Tuesday, Trump's war—and the subsequent shocks it has caused to the global diesel supply—have pushed the national average price in the U.S. up $2.70 per gallon from a year ago, a 74.6 percent increase, according to AAA data.
Unfortunately, the war in Iran is just one of several Trump administration policies making life more expensive for everyone, including the nation's farmers and ranchers. Tariffs on imported fertilizer, which began in 2020 during the first Trump administration, have made it difficult for American farmers to afford what they need. By the Farm Bureau's estimates, fertilizer costs for 2026 are projected to reach a record $40 billion, up 15 percent from the previous year.
The $8 billion program is part of a windfall of taxpayer money the Trump administration has sent to farmers as relief for harms caused by the president's actions. Last December, the USDA sent $11 billion in one-time bridge payments to more than half a million farmers nationwide. Earlier this month, the USDA announced it would provide a record $13.8 billion in gross payments to agricultural producers to cover revenue losses.
In a speech in Kansas touting the program, Trump claimed that the state's residents would see a "plunge" in prices once the war ends. That's likely an exaggeration, given the host of questionable economic policies he seems hell-bent on implementing.
Still, that shouldn't discredit the president's suggestion. Ending the war would benefit farmers, ranchers, and consumers, without doling out billions in another government bailout for a favored industry.
The post Trump's $8 Billion Diesel Bailout Pays Farmers for a Problem He Created appeared first on Reason Magazine.
Today, the Liberty Justice Center (LJC) filed Gellert Global Group Corp. v. Trump, the first lawsuit challenging President Donald Trump's massive Section 338 tariffs against a variety of Canadian imports. The case was filed in the US Court of International Trade (which has jurisdiction over tariff-related cases); Gellert Global Group is an importer of Canadian cheese subject to the tariffs. LJC is the same public interest group that I worked with on the case challenging Trump's earlier IEEPA tariffs, which ultimate resulted in their invalidation by the Supreme Court. I am not directly involved in the present case. But I support it and believe it deserves to prevail.
LJC has also filed cases challenging Trump's massive Section 122 and Section 301 tariffs. They have become America's premier public interest law group standing up for free trade and enforcing constitutional constraints on executive power over trade restrictions.
Section 338 was part of the infamous Smoot-Hawley tariff act of 1930, which gravely exacerbated the Great Depression. It has never been used before, likely because it was superseded by later laws.
I have previously written about why Trump's Section 338 tariffs are harmful and illegal. See my recent Montreal Economic Institute paper on this topic, and earlier pieces here, here, and here. To briefly summarize, the tariffs on Canada are illegal because 1) Section 338 has been superseded by later legislation, 2) even if Section 338 is still operative, Trump's tariffs do not meet its requirements because the Canadian actions they supposedly respond to do not "discriminate" against US goods, as the law requires, 3) Trump's tariffs do not "offset" the Canadian actions (as Section 338 also requires), but go far beyond that, 4) the administration's interpretation of Section 338 runs afoul of the "major questions" doctrine, and 5) if Section 338 is operative and does authorize the Trump actions, it would violate the constitutional nondelegation doctrine (which restricts delegation of legislative power to the executive).
The LJC complaint advances all five of these arguments. To prevail, they need win on only one. They also add a few more technical points that I will not try to cover here. LJC further seeks a class action certification for a class of all those importers subject to the Section 338 tariffs. If this succeeds, it would block all enforcement of Section 338 tariffs, not just those paid by Gellert.
This lawsuit does not directly challenge Trump's extension of the Section 338 action to categorically ban some Canadian imports, in addition to imposing tariffs. As far as I can tell, Gellert does not import goods subject to the ban (as opposed to the tariffs). However, as I explained here and here, the legality of the bans is dependent on that of the initial tariffs. In a recent Lawfare article, I outline the reasons why executive-imposed import bans are subject to most of the same legal constraints as executive-imposed tariffs.
Like the IEEPA, Section 122, and Section 301 tariffs, Trump's use of Section 338 is an attempt to convert a limited delegation of authority into a blank check enabling the president to impose tariffs whenever he wants. Courts should reject all of these power grabs.
I commend LJC for bringing this important case. And I hope and expect it may not be the last lawsuit challenging the Section 338 measures. Future cases might well challenge the import bans directly, as well as the tariffs.
The post Liberty Justice Center Files First Lawsuit Challenging Trump's Section 338 Tariffs Against Canadian Imports appeared first on Reason Magazine.
Donald Trump loves to put his name on things, and when it comes to the recent burst of inflation, it’s totally deserved. Trump and Republican politicians are doing their best to try to make a simple story complicated. But there is no doubt that Trump is the lead and almost sole author of the inflation […]
The post Trumpflation is here and it’s all Trump’s doing appeared first on Asia Times.
This week, editors Peter Suderman, Katherine Mangu-Ward, Nick Gillespie, and Matt Welch discuss the riots engulfing France and whether the country's increasingly unsustainable welfare state has made it ungovernable. They examine competing claims that immigration and austerity are fueling the unrest, the political gains being made by the French right, and why even modest pension reforms provoke fierce resistance.
The conversation turns to the United States, where President Donald Trump's tariffs are losing support among blue-collar voters and Republicans are struggling in traditionally conservative areas like Ohio. The panelists then discuss the abrupt departure of White House press secretary Katie Zacharia after just five days on the job. Later, they examine Sen. Elizabeth Warren's (D–Mass.) opposition to a proposed $45 billion merger involving McCormick and Unilever. Finally, a listener asks why libertarians don't follow the Democratic Socialists of America's example by trying to reshape the Republican Party from within.
0:00—France's riots and the imploding welfare state
21:29—Trump's tariffs lose support among blue-collar voters.
29:41—Zacharia's tenure as White House press secretary
35:45—Listener question on libertarian influence strategy
45:52—Warren's corporate merger opposition
57:07—Weekly cultural recommendations
Reason Versus - Authoritarianism Is a Right-Wing Problem, November 10
"France Burns," by Liz Wolfe
"Protesters in France and Spain Are Angry at Government Failure—and Demanding More Government," by Reem Ibrahim
"French Tantrum," by Liz Wolfe
"Yes, Heavy Regulation Hurts the Economy. Just Look at France." by Veronique de Rugy
"Even Blue-Collar Workers Have Turned Against Trump's Unpopular Tariffs," by Eric Boehm
"Ohio's Democrat Momentum," by Liz Wolfe
"Trump Fired Kimberly Guilfoyle for Influence Peddling That Pales Next to His Presidential Profiteering," by Jacob Sullum
"Why populism leads to decline," by Nick Gillespie
"How Third Parties Die," by Jesse Walker
"How GOP Fiscal Sanity Died, in 7 Easy Steps," by Matt Welch
"Be Prepared for Elizabeth Warren's Reign of Economic Error," by Nick Gillespie
"Elizabeth Warren Wants the Government To Investigate America's 'Sandwich Shop Monopoly,'" by Christian Britschgi
"The Elizabeth Holmes Documentary You Can See Everything Is an Act of Radical Empathy," by Peter Suderman
"Thank Dutch Merchants, Not a Strong State, for Capitalism," by Edward Stringham
Cato Innovation Project: Design your own full-time, paid role at Cato. If we fund your idea, you spend two years executing it. Apply here: cato.org/reason
The post France's Welfare State Is Finally Imploding appeared first on Reason Magazine.
© Illustration: Fatima Ruiz
US President Donald Trump wrote in a Truth Social post on 18 October that he did not want to “drive, foolishly, Russia away from the bargaining table.” He also wrote: “Signing that document at this time will do that, and I can sign it later, or any time that I want!”
Trump was referring to sanctions and tariffs under the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which he waived in an executive order on 16 October, days before the measures were due to take effect. The waiver suspends additional economic penalties intended to pressure Moscow over its war against Ukraine, while leaving earlier US sanctions in place. The decision came weeks before the 3 November midterms, in which Republicans are defending slim majorities in both chambers, and analysts said the penalties could have pushed up oil prices for Americans already paying more, largely because of the US-Israeli war with Iran, Reuters reported.
A week before the waiver, Trump had announced a deal for Russia to increase diesel supplies to global markets. The Treasury also issued a license, valid until 7 April 2027, permitting certain transactions in Russian-origin diesel.
In the Truth Social post, Trump accused Ukrainian President Volodymyr Zelenskyy of targeting Russian diesel refineries, saying the strikes were “seriously hurting the world diesel markets, including those in the United States.” Kyiv had paused its refinery strikes for three days at Washington’s request after Trump declared an energy ceasefire on 11 October, which Russia never confirmed, then resumed them. Since then, Russia has struck Ukraine’s energy sector 76 times, Zelenskyy said on 18 October.
Trump wrote that Zelenskyy “doesn’t want to end this war, and probably never did,” and that he “could have made a better deal two years ago than he can now.”
“His country is in shambles, a large portion of his land is lost, his oceans and seas are gone, and his male population is low, wounded, and/or dead,” Trump added.
He also said Russia was “doing very little, if anything, to help” Iran and that he wanted to keep it that way.
On 17 October, Trump told reporters at Mar-a-Lago that he had not announced his final decision. “A lot of you don’t know what my decision is yet, but we’ll figure it out, and you’ll figure it out,” he said, Reuters reported.
“I think the president wants to take the 60-day period of time to sort of analyze what imposing both sanctions and tariffs will mean to the global economy and even to the US economy,” US Secretary of State Marco Rubio told reporters before departing for Uzbekistan the same day.
Zelenskyy called it a “pity” that Trump had waived sanctions under a law named for the late Senator Lindsey Graham, who “really believed in Ukraine.” He said he hoped Trump would change his decisions, NBC News reported.
Discussing the diesel deal on NBC’s Meet the Press, Zelenskyy said US oil prices had risen because shipping through the Strait of Hormuz was blocked, not because of Ukraine.
On 17 October, Zelenskyy told journalists that “the decision to undo all of this, to block all of it, seems wrong to me” and that it “definitely helps only the Russians.” His remarks appeared in Ukrainian on his official Telegram channel.
“Sanctions relief will continue. I think the diesel deal and the move regarding the Lindsey Graham Act are not the end of it. Unfortunately,” Zelenskyy said.
On 19 October, Zelenskyy wrote that partners had again given no warning of Russia’s overnight ballistic attack and that blocking missiles for Ukraine’s air defense while Russia gets sanctions eased or postponed amounts to partners denying reality.
Republican Senator James Lankford defended Trump’s decision on NBC’s Meet the Press, saying the president was “choosing the American people first.”
Senator Darline Graham, Lindsey Graham’s sister, whom Trump has endorsed for a full term, said at a campaign stop on 17 October that she would “choose to keep the pressure on Russia.”
“I don’t trust Putin and I don’t trust Russia,” Darline Graham said.
She did not directly criticize Trump but said she would not have made that choice, Reuters reported.
US President Donald Trump has suspended the tariffs and sanctions on the biggest buyers of Russian oil set by the Lindsey Graham Act, the law he signed himself in September. He says the move serves US national interests, according to an executive order published on the White House site.
The act required the president, within 30 days, to impose 100% tariffs on all goods from the five biggest buyers of Russian oil, to sanction a range of Russian entities and to put 500% tariffs on all Russian energy imports to the US. The deadline for those measures fell on 18 October.
Trump has used the president’s power under Section 115 of the Graham Act, which allows him to waive sanctions, restrictions, and duties by certifying to Congress in writing that doing so serves US national interests and submitting a report explaining why. The act does not, however, allow him to cancel sanctions that have already been announced.
The two capitals read the same order in opposite ways. Kirill Dmitriev, an envoy for Russian leader Vladimir Putin, called it “an important and truly historic moment” on X, claiming the sanctions had mainly harmed the US economy and world markets.
“Economic cooperation between Russia and the US serves the interests of both nations, contributes to global economic stability and lays the foundation for building trust and achieving lasting peace,” Dmitriev writes.
President Volodymyr Zelenskyy answered from under fire. Russia struck Ukraine’s energy system on 17 October, and at that very moment Washington chose “to completely ignore the Lindsey Graham law, which was supposed to impose real, effective pressure on Russia to end this war,” he says.
The waiver lands amid a bipartisan revolt in Congress. Seven Republican and Democratic senators had already warned on 11 October that Trump’s move to allow Russian diesel imports had broken the law Congress passed after the full-scale invasion, urging the administration to reverse it so US money would not help finance Russia’s war.
Meanwhile, Zelenskyy argued the law can still work if Washington lets it.
“This law could, and still can, help a great deal. But the law has actually to work, and every vote for it matters,” he said, warning that the step only pushes Moscow to strike harder.
The world must not give up ground and must try to end the war, Zelenskyy added.
“To end it, and not give Putin every reason to continue it indefinitely,” he stressed, thanking everyone who “is truly fighting for peace and helping Ukraine," he stated.
The Ukrainian opposition also commented on Trump’s decision. Iryna Herashchenko, co-chair of the European Solidarity parliamentary faction, said that “the most cynical and stupid decisions are usually made by rulers on Saturday night,” when public attention is scattered, and people are preparing for the weekend.
“Rehabilitating Putin harms not only Ukraine but also the US itself, strengthens the axis of authoritarian regimes, and undermines international security,” she claimed.
Beijing has rebuffed a European Union request to voluntarily cap hybrid car exports to the bloc, raising the prospect of new, steep EU tariffs on Chinese hybrids, which have so far escaped the duties on pure electric vehicles. China has refused to set quotas on its exports of hybrid electric vehicles (HEVs) and plug-in hybrid […]
The post EU weighs safeguard tariffs as China refuses hybrid car limits appeared first on Asia Times.
European Union countries are rushing to find a joint response to threats by US President Donald Trump to impose an additional 10-percent tariff on goods from several European allies from February 1.
EU leaders are set to meet in Brussels on Thursday after Trump threatened that eight European countries would face higher tariffs until the United States secures what he described as the “complete and total purchase” of Greenland.
The US repeatedly said it wants the mineral-rich autonomous Danish territory of Greenland for “national security”, despite it already having a base on the island and long established security agreements with fellow NATO ally Denmark, which has controlled the Arctic island for about 300 years.
Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden and the United Kingdom recently sent a small number of soldiers on a reconnaissance mission to Greenland as a sign of solidarity with Denmark, which is pushing back against Trump’s takeover ambitions.
“We won’t be blackmailed, and we stand together in solidarity in Europe,” said German Finance Minister Lars Klingbeil, arriving in Brussels on Monday for two days of previously planned talks with his EU counterparts. “We don’t want an escalation. We are not looking for an escalation, but we are ready if it comes,” Klingbeil said.
Italian Prime Minister Giorgia Meloni – considered one of Trump’s few allies in the EU – has called the new tariff threat a “mistake”.
In a different threat scenario, Trump also ramped up his rhetoric against France on Tuesday, warning he would impose 200 percent tariffs on French wine and champagne over its intentions to decline his invitation to join his “Board of Peace” set up to oversee the rebuilding of Gaza.
French President Emmanuel Macron said at the World Economic Forum (WEF) in Davos (Switzerland) on Tuesday: “What doesn’t make sense is to have tariffs between allies. We have to fix the war in Ukraine, we have to help the Ukrainians resist, and find a sustainable peace.”
Macron called the possibility of potentially activating the Anti-Coercion Instrument against the US “crazy” and added: “I do regret that. But this is a consequence of just unpredictability and useless aggressivity.”
European Commission President Ursula von der Leyen has warned Trump not to plunge transatlantic relations into a dangerous downward spiral over Greenland. “This is why the proposed additional tariffs are a mistake, especially between long-standing allies,” she said in Davos.
Arctic security can only be achieved together.
— Ursula von der Leyen (@vonderleyen) January 20, 2026
This is why the proposed additional tariffs are a mistake, especially between long-standing allies.
The EU and US have agreed to a trade deal last July.
A deal is a deal.
And when friends shake hands, it must mean something. pic.twitter.com/5wpMic148s
The leader of global rights group Amnesty International, Agnes Callamard, urged European countries Monday to stop “appeasing” Trump and to resist him and other “bullies” who she said were intent on destroying the rules-based order in place since World War II.
Since Trump’s return to the White House a year ago, he has taken “a range of decisions that have led to the demise of many rules around the world”, while Russia was destroying the system “through its aggression in Ukraine”, the human rights organisation’s secretary general told AFP in an interview in Davos.
The post-WWII order “is also being destroyed by Israel that has completely ignored international law in its genocide of Palestinians in Gaza”, she added.
Furthermore, European powers have been treading a thin line over Ukraine in recent months, relying on Washington to try to help settle the conflict but resisting terms too favourable to Moscow.
Trump meanwhile has put the transatlantic alliance to the test with threats to take over Greenland “one way or the other”, as European countries close ranks against Washington’s designs on the vast Danish autonomous territory.
In a message to Norway’s Prime Minister Jonas Gahr Store, Trump said “I no longer feel an obligation to think purely of Peace”, citing his failure to win last year’s Nobel Peace Prize despite openly coveting it. He said although peace would still be “predominant”, he could “now think about what is good and proper for the United States of America”.
Store said in a statement: “I have clearly explained, including to President Trump, what is well known – the prize is awarded by an independent Nobel Committee”, not the Norwegian government.
Amid the global tensions, Denmark is proposing that NATO start surveillance operations in Greenland, with the support of the Arctic island, Defence Minister Troels Lund Poulsen said Monday after meeting NATO’s chief Mark Rutte. The precise details of the proposal and the response from Rutte remain unknown.
While a number of NATO allies have sent troops to Greenland or have announced plans to do so despite the risk of additional US tariffs being imposed on them, others remain reluctant and divided over the move.
Belgium is sending a liaison officer to Greenland. Despite this decision, the country was not included on Trump’s list of sanctioned countries on Saturday. “But there is no guarantee that this will not be the case in the future and we must show solidarity with our colleagues”, Foreign minister Maxime Prévot said. He called the American measures “incomprehensible and unnecessarily hostile”.
Likewise, Slovenia on Saturday announced it would deploy two Armed Forces officers to Greenland to take part in the planning and implementation of the Danish-led international military exercise Arctic Endurance.
Poland’s Prime Minister Donald Tusk – whose country is a staunch NATO ally with the highest defence expenditure as a share of gross domestic product (GDP) in the EU – already said last week the country was “not planning to send Polish soldiers to Greenland”.
Contrary to false claims on social media that Germany had sent warships to Greenland, the country did send 15 soldiers to the island for a reconnaissance mission. The troops however left Greenland on Sunday after the mission was completed on schedule, according to the Ministry of Defence.
Spain has not announced plans to participate in the mission in Greenland. Defence Minister Margarita Robles however said recently that the country could join the group in the future.
At the same time, some NATO allies are still navigating how the Greenland dispute plays out in their domestic political debates.
Asked on Monday whether the government of the Czech Republic supports Greenland, Prime Minister Andrej Babiš said he could not give a clear answer. He added that the United States is the leader of NATO and that conflicts are counterproductive. “We definitely prefer that an agreement be reached within the alliance. It would be very unfortunate if there were to be any conflicts,” Babiš said.
In Bulgaria, political reactions are mixed. The outgoing government has not issued a position on the recent developments around Greenland, but reactions from parliament have begun to emerge.
On the one hand, the leader of Continue the Change – a party affiliated at European level with Renew Europe – Assen Vassilev, said that every country should have the right to determine its own future, rather than having its choices dictated by external powers.
On the other hand, Revival (Vazrazhdane) – whose MEPs sit with the Europe of Sovereign Nations Group in the European Parliament – backs the US claims over Greenland. Party leader Kostadin Kostadinov reiterated the party’s call for Bulgaria to withdraw from NATO and argued that tensions between Washington and Copenhagen expose deeper structural problems within both NATO and the European Union.
Slovakia’s Foreign Minister Juraj Blanár said “Slovakia considers Greenland to be part of Denmark”. He rejected tariff battles between states: “We prefer diplomacy and peace, not tension or fighting,” he said.
EU leaders will meet in Brussels on Thursday to discuss a coordinated response to the prospect of US tariffs – with its most powerful trade tool on the table.
The Anti-Coercion Instrument, a mechanism adopted in 2023, that can be used in cases of economic coercion when a non-EU country attempts to pressure the bloc or one of its 27 members into making a decision through trade restrictions.
Such practices “unduly interfere with the legitimate sovereign choices of the European Union and its member states”, the European Commission says on its website.
France had signalled its intention to request the activation of the instrument after Trump announced on Saturday that he would impose additional tariffs on the eight NATO allies.
To apply the instrument, the European Commission first has to examine whether economic coercion is present in the case. EU countries must then back the Commission’s conclusion, before the EU’s executive arm ideally enters into talks with the country. If these are unsuccessful, the EU can impose countermeasures.
Retaliatory measures under the ACI however are only a last resort and must be proportionate. Using it against the United States would be ”the very first time” the EU has ever applied the tool, Macron recalled in Davos on Tuesday.
Should the ACI be applied over Trump’s latest trade threats, retaliatory tariffs on imports of US goods are likely. The EU-US tariff agreement concluded in July could also be put on hold.
Under discussion is also the possibility of imposing additional tariffs on a list of goods with a total trade volume of 93 billion Euro (108 billion Dollar), including industrial and agricultural goods such as motorcycles, beef, whiskey and citrus fruits.
This article is an ENR Key Story. The content is based on information published by ENR participating agencies.
Brussels (dpa) – European Council President António Costa will convene a special summit following US President Donald Trump‘s new tariff threats in the Greenland dispute, with Thursday being considered a possible meeting date, an EU official said on Sunday.
While the date has not been definitively determined, it is clear that a meeting will take place.
Costa said that his consultations with member states on the recent tensions surrounding Greenland had made it clear that tariffs would undermine transatlantic relations and were incompatible with the EU-US trade agreement.
He said that the EU was prepared to defend itself against any form of coercion. At the same time, it wanted to continue to work constructively with the United States. There was a common transatlantic interest in peace and security in the Arctic, particularly through cooperation within NATO.
The meeting would involve EU heads of governments and states and comes after Trump announced on Saturday that he would impose a 10 percent tariff on goods from eight European countries from February 1, rising to 25 percent from June 1 if no resolution is reached to his satisfaction, which would be the “complete and total purchase” of Greenland.
Six of the eight countries – Germany, France, the Netherlands, Denmark, Sweden and Finland – affected by the tariffs are EU members, while the United Kingdom and Norway are also on Trump’s list.
The tariffs come as the above mentioned NATO allies have sent soldiers to the Arctic island, something the Trump strongly criticised. “Denmark, Norway, Sweden, France, Germany, The United Kingdom, The Netherlands, and Finland have journeyed to Greenland, for purposes unknown,” he wrote, describing this as “a very dangerous situation for the Safety, Security, and Survival of our Planet” he wrote in a post on his Truth Social platform on Saturday.
On Sunday the eight nations issued a joint statement warning of a “dangerous downward spiral” stemming from Trump’s tariff announcement.
All eight countries are members of the NATO defence alliance. NATO chief Mark Rutte is to meet with ministers from Greenland and Denmark on Monday over the dispute.
Greenland, a largely autonomous Arctic island, is part of the Kingdom of Denmark and is therefore also in NATO. (18 January)
Growing popularity of electric vehicles (EVs) from China is causing headaches for European carmakers – and for Brussels, with national governments clamouring for protection for their national champions.
The European Commission, which is in charge of trade policies for the bloc, has to square the circle between avoiding a trade war and injecting some life into the idling economy.
In one recent step the EU is attempting to introduce minimum prices for Chinese made EVs to offset subsidies instead of slapping on more tariffs.
The EU in 2024 had introduced tariffs of up to 35.3 percent on EVs imported from China after an anti-subsidy probe concluded that the country’s support undercut European automakers. Manufacturers in China benefit from unfair subsidies that give them a significant advantage in the European market. Since then, the two sides have been engaged in talks to find other solutions.
Under new guidelines published by the Commission last week, companies can commit to setting minimum prices for vehicles exported to the European Union in order to avoid the price surcharges. In addition, in the case of a corresponding offer, commitments to invest in the EU or to limit exports would be positively taken into account.
Such offers would be assessed objectively and fairly by the Commission, according to the new guidelines. A prerequisite for acceptance is that the measures eliminate the damaging effects of subsidies and have an effect equivalent to the tariffs.
The published document was “intended to provide guidance to Chinese exporters who may be considering submitting price undertaking offers for exports of battery electric vehicles to the EU, which are currently subject to countervailing duties,” Commission spokesman Olof Gill said.
He said that at present, the Commission has received one price undertaking offer, without specifying which company or for which model. He added that the Commission is ready to consider other proposals, provided that they “adequately address the unfair competitive advantage” and demonstrate that they are “feasible in practice”.
Leading German automotive expert Ferdinand Dudenhöffer, head of the private institute Center Automotive Research (CAR), was sceptical of the effects of the minimum prices could have on competition.
According to EU calculations, manufacturers in China benefit from unfair subsidies that give them a price advantage of around 20 percent on the European market. For this reason, tariffs ranging from 7.8 to 35.3 percent were imposed from 2024, depending on the manufacturer. German and US companies that manufacture in China are also affected. In retaliation, China imposed special tariffs on EU goods such as spirits, pork, and dairy products.
According to CAR, Chinese manufacturers sell their models in the EU at an average markup of 118 percent on top of the domestic price. “Given the current price level in Europe, there should still be significant scope for Chinese manufacturers to reduce prices,” said Dudenhöffer.
According to the latest report by the EU research agency Eurofound, the automotive industry in the EU directly employs around 6 million workers and another 6 million in related sectors.
Since 2019, the pace of job losses in the sector has clearly accelerated. In 2024 alone and at the beginning of 2025, layoffs announced by European companies affected around 100,000 jobs.
The largest employment losses have been recorded in countries with a strong presence of Europe’s biggest car manufacturers. In France, a structural decline is feared, while since 2019 job cuts have also affected Germany, Italy, and, to a lesser extent, Spain. Central and Eastern European countries – Czechia, Hungary, Poland, Romania, and Slovakia – are facing the relocation of production outside the EU to countries with lower labor costs.
This is happening because sales of cars originating from China, including electric vehicles (EVs), are increasing in the EU. In practice, some of these cars on EU markets are not only models of Chinese brands but also vehicles produced in China for Western brands.
Germany, for many years a global carmaking powerhouse, is facing a dilemma. Demand for EVs is rising, but it is not just the battery powered Volkswagens or BMWs customers are flocking to – and the long-term outlook is dire.
Electric vehicle sales rebounded strongly in Germany in 2025, according to official data from early January this year, with Chinese manufacturers making inroads from a low base in the EU’s largest economy despite tariffs.
EV sales rose 43.2 percent last year to 545,142 in total, the KBA federal transport authority said, representing 19.1 percent of all new cars sold.
Chinese EV giant BYD – which last year overtook Elon Musk’s Tesla to become the worlds largest electric carmaker – saw its German sales rise over 700 percent to more than 23,000 cars, giving it 0.8 percent of the overall auto market.
“International vehicle manufacturers with affordable battery electric vehicles and plug-in hybrids have contributed disproportionately to growth in these segments,” said Imelda Labbé, head of the VDIK foreign carmakers’ lobby in Germany.
The rise in EV sales last year comes after a fall of almost 30 percent in 2024 following the withdrawal of government subsidies, and Germany’s electric car market is still smaller than optimists had hoped for. After the decline in the market in 2024, the government said in December it would introduce subsidies again.
Some motorists will be able to benefit from 5,000 Euro for the purchase of new EVs or hybrids so long as their components are largely made in Germany. But industry figures say that better charging infrastructure and cheaper power would be needed to really boost EVs and warned that the planned subsidy would have limited impact.
On the other hand, German carmakers have been reporting strong declines in vehicle sales in China. Volkswagen said in January its sales dropped by 8 percent in 2025 year-on-year, as it was facing intense competition on the Chinese market from local producers. Mercedes-Benz reported a 19 percent decline in sales for the year, while BMW sold 12,5 percent fewer cars in China.
German manufacturers like Mercedes or VW sell about 30 percent of their cars on the Chinese market.
The tug-of-war affects not just major players, but the automotive sector across the continent.
Bulgaria for example is not a major car producer, but it is increasingly important as a supplier of automotive components to European manufacturers. The sector has grown into one of the country’s strongest industrial branches, generating close to 11 billion Euro in annual turnover, according to business media and industry analyses.
This means that it is indirectly exposed to the EU-China trade dispute over electric vehicles: weaker competitiveness of European carmakers could reduce orders for Bulgarian suppliers, while a recovery in EV sales in core markets such as Germany would have the opposite effect.
At the same time, Chinese manufacturers are not only exporting cars to Europe but are also expanding production and partnerships within the EU, with Bulgaria being increasingly part of China’s automotive strategy in Southeast Europe according to analysts.
For Bulgaria, this creates a mixed impact: EU trade measures may protect European carmakers, but Chinese localization in Europe could also open new opportunities for Bulgarian suppliers.
Dudenhöffer expects the sector to shrink in the next years in Germany and Europe, as manufacturers shift their production to the US or Asia, he said in his market forecast for 2026.
“Growth is taking place in Asia, and Asian car manufacturers (Japan, Korea, China) are increasingly dominating the car business.”
Ferdinand Dudenhöffer, German Automotive Expert
And then there are of course the EU’s green policies: The EU in December rolled back a 2035 ban on new petrol and diesel cars seen as a milestone in the fight against climate change, as the bloc pivots to bolstering its crisis-hit auto sector.
Under proposals slammed by green groups as an act of “self-sabotage”, carmakers will have to cut exhaust emissions from new vehicles by 90 percent from 2021 levels – down from an envisaged 100 percent.
This means that in practice automakers will still be able to sell a limited number of polluting vehicles – from plug-in hybrids to diesel cars – beyond 2035, provided the resulting emissions are “compensated” in various ways.
The EU’s Industry Commissioner, Stéphane Séjourné, insisted the bloc’s green ambitions stood intact as he put forward a plan billed as a “lifeline” for Europe’s auto industry.
The combustion-engine ban was hailed as a major win in the climate fight and a key tool to drive investments in electrification when adopted in 2023.
The compromise plan was slammed by both environmentalists and industry groups.
While the EU had recognised that remaining open to different technologies was important, its proposal was “fraught with so many obstacles it threatens to remain ineffective in practice”, the president of the German Association of the Automotive Industry (VDA), Hildegard Müller, said. “In times of increasing international competition, in times when European economic power is crucial, this overall package from Brussels is disastrous.”
The future of German car manufacturers – and by extension automakers in other EU member states – is closely linked to the Chinese market.
According to Dudenhöffer, they must develop and build electric cars “in China for China”. In this context, he criticised the softening of the combustion engine phase-out. He said it was not possible to disconnect from developments, but that it is necessary to face competition in the tough Chinese market. “If you’re not in China, you’re not in the car business.”
This article is an ENR Key Story. The content is based on information published by ENR participating agencies.
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