How to develop a common European vision

As for the effects, they can increase revenue and protect domestic industry, but also generate negative ones on prices and trade dynamics, or on market efficiency. In this perspective, the application of tariffs has always been very carefully assessed, with a careful balancing act between economic protection needs and the effects on growth and the status of a given country.

The 'violent' approach on tariffs of the new US administration, not to mention the geopolitical consequences, raises enormous doubts about economic and fiscal sustainability: while it is true that tariffs generate (hopefully for those who impose them) resources, their impact is reflected in prices, inflation and purchasing power, in this case of the United States.

As for the European Union, the affair can finally create a common feeling, albeit with difficulty, and a united economic and perhaps political front (pending the fiscal one, the real vulnus due to the anachronistic unanimity rule that is now untenable).

Wanting to overcome the recent tsunami, it is worth imagining 'high' duty functions, with Europe leading the way.

Let's take the CBAM, Carbon Border Adjustment Mechanism, recently introduced by the European Union: it is, to simplify it to the utmost, a duty on CO2 emissions incorporated in imported carbon-intensive products. It does not have a protectionist or retaliatory purpose, but pursues the goal of preventing the risk of 'carbon leakage', the transfer of production to countries with (much) less stringent environmental regulations, thus helping to maintain the EU's climate standards and encouraging ecological transition. In this case, duties not only protect the competitiveness of European industry, but also contribute to climate and environmental protection: no longer instruments of retaliation (or war), but strategic levers for the pursuit of broad and shared objectives. In other words, taxes aimed at preserving the environment by taxing harmful goods, and rebalancing the economic distortions created by different regulations.

And so, starting with the CBAM, the EU could take a further step forward, with a view to 'counter-duties': why not imagine tariffs aimed at counteracting the localisation of activities in countries where there is no regulation to protect workers, or labour costs are much lower, or human rights are violated? This would also make it possible to counter illegal or immoral conduct granted by other jurisdictions, and would further enhance the function of tariffs. Which would become a very strong instrument of sustainability.

If in 1773 the United States of America was born out of tariffs, today the United States of Europe could be born out of the war on tariffs, in the prism of sustainability.

Dean of the Faculty of Economics and Law, Università Cattolica del Sacro Cuore