As the global economy faces turbulent changes, US President Donald Trump's newly introduced metal tariff policy has dropped like a bombshell, stirring up a huge storm in the trade sector. Meanwhile, trade representatives from the United States and the European Union are engaged in urgent talks in Paris, attempting to find a breakthrough amid increasingly tense trade relations. This not only concerns the future of the two major economies but also affects the nerves of global markets.

Trump Doubles Tariffs, Global Economy Hit Again

On June 4th, the Trump administration announced a significant increase in import tariffs on steel and aluminum, raising them from the previous 25% to 50%. This new policy officially took effect at 4:01 AM (GMT) on the same day, applying to all trading partners except the United Kingdom. Previously, the UK temporarily avoided this heavy blow by reaching an initial trade agreement within the 90-day tariff suspension period set by Trump, while other countries face greater pressure after the tariff suspension period ends on July 8th.

This decision undoubtedly injected new uncertainty into the global economy. The US also demanded that trading partners submit their "best proposals" by July to avoid further punitive tariffs. This high-pressure strategy caught global trading partners off guard and heightened market concerns about future trends. Trump's move is seen as another challenge to the global trade system, triggering a chain reaction from currency markets to stock markets.

EU and US Paris Talks Seek a Breakthrough

On the same day the tariffs took effect, EU Trade Commissioner Maroš Šefčovič and US Trade Representative Jamieson Greer held tense but constructive talks in Paris. Šefčovič told the media that both sides were moving in the right direction, and the content of the negotiations was already very specific. He revealed that technical talks are currently underway in Washington, and higher-level engagements will follow. He optimistically stated: "I see clear progress, and this fills me with confidence."

Greer also affirmed the results of the talks, pointing out that the EU showed a willingness to cooperate, and both sides are exploring specific paths to achieve reciprocal trade. This positive signal brings a glimmer of hope to the tense trade situation, but whether the differences can be truly resolved still requires time to verify.

Global Economy Under Pressure, Critical Mineral Shortages Intensify Crisis

Trump's tariff policies are not limited to the metal sector; their chain reactions are spreading throughout global supply chains. The US Congressional Budget Office (CBO) released a report on June 4th, stating that Trump's multiple new tariff measures as of May 13th will lead to a decline in US economic output, highlighting the potential risks of trade protectionism.

Meanwhile, global markets face another threat: restrictions on critical mineral exports from a major Asian country. This measure directly impacted the European automotive parts industry, with some factories even suspending production. German automotive giant BMW publicly warned that its supplier network was severely affected by rare earth shortages. The American Automotive Policy Council also stated that high tariffs would push up US auto assembly costs, reducing the competitiveness of the US auto industry in the global market.

Strong Reactions from All Sides, Trade War Clouds Loom

EU Trade Commissioner Šefčovič expressed "deep regret" over the doubling of steel tariffs. He pointed out that both the EU and the US face the challenge of global steel overcapacity, and both sides should work together rather than escalating sanctions against each other. Canadian Prime Minister Justin Trudeau went further, directly calling the new US tariffs "illegal," and stating that intensive negotiations are underway with the US side to try and mitigate the impact of the tariffs on Canada.

Although global currency, bond, and stock markets reacted relatively calmly to the latest tariff measures, many investors are betting that Trump may not maintain such extreme tariff policies for long. However, Marc Busch, a trade policy expert at Georgetown University, warned that the new tariffs would affect a wide range of industrial chains, from automobiles and aircraft to aluminum beer cans, processed product cans, and machinery and equipment, with none spared. This uncertainty leaves global markets treading on thin ice.

Conclusion: Trade War Escalation or Turning Point Ahead?

Trump's metal tariff policy is like a storm sweeping across the global economy, forcing the EU, Canada, and other trading partners to respond urgently. At the same time, the Paris talks between the US and the EU have shown a degree of sincerity in cooperation, bringing hope for easing the tense situation. However, against the backdrop of critical mineral shortages and pressure on global supply chains, trade war clouds still loom. In the coming weeks, the results of high-level talks in Washington and the phone call between US and Chinese leaders will be key to determining the future direction of global trade.

In the short term, Trump's tariff policy may indirectly push up gold prices by increasing safe-haven demand and dollar volatility, but the magnitude depends on market expectations for the duration of the trade war. In the long term, if tariffs lead to rising inflation or further pressure on the global economy, gold prices may gain stronger support. However, in the short term, if the market believes the tariffs will not be long-lasting (as some investors anticipate), gold's upward momentum may be limited, and gold prices could even face correction risks.