On Friday, May 9th, Roland Gillet, Christian Parisot, a renowned economist and advisor to Aurel BGC, and Emmanuel Combe, Senior Advisor at Image 7, debated the implementation of American customs duties and their impacts on the U.S. economy and the global market.

Roland Gillet specifically pointed out that if Donald Trump aims to protect American consumers by shielding them from the additional costs of imported goods, he will need to negotiate with Europeans. The protectionist measures taken by the Trump administration face the challenge of demand inelasticity. Inelastic demand for luxury goods means that even if prices increase, consumption of these products does not decrease. The American demand for European luxury items—such as Ferrari, French fine wines, or high-end leather goods—is inelastic because these products are not substitutable within the U.S. market. In other words, American consumers cannot easily turn to equivalent alternatives. Conversely, in trade relations with Canada and Mexico, Trump might explore substitution options for certain goods, which could influence the negotiations’ dynamics.

You can find the second part of the program Les Experts: Customs duties, who is responsible for paying ?