Trump's Proposed Tariffs Could Shatter Transatlantic Trade: EU Trade Commissioner

EU Trade Commissioner Maroš Šefčovič has voiced serious concerns over President Donald Trump's recent threat to impose tariffs of 30% on European goods, stating that such measures would nearly obliterate transatlantic trade. Current trade relations between the EU and the US amount to a substantial $44 billion, roughly $38 billion daily, and a drastic tariff increase would fundamentally disrupt this economic partnership. After a meeting with EU trade ministers in Brussels, Šefčovič expressed hope for a negotiated resolution before the looming August 1 deadline. "We want to use every day, every possibility, and every minute until August 1 to find a negotiated solution," he stated. However, he emphasized that a 30% tariff was utterly unacceptable. Trump's announcement, communicated via a letter on social media, came as a shock to EU negotiators who believed they were nearing an agreement that would set tariffs at a more manageable 10% level. In response to this development, the EU decided to delay retaliatory tariffs on $21 billion worth of US goods that were scheduled to take effect immediately. Further discussions regarding potential countermeasures affecting $72 billion of US imports were also initiated, though specific details remain undisclosed. Expressing optimism, Šefčovič remarked, "You would not spend three months on drafting an agreement in principle and discussing 1,700 tariff lines if this was just going to end because of one, albeit very significant, letter." He anticipated further conversations with US counterparts later that day. Denmark's Foreign Minister Lars Løkke Rasmussen, who presided over the discussions, noted the shared resolve among European nations to avoid a trade war, recognizing its damaging potential for both sides. He stated, "We don’t want to escalate things; however, we also need to show some strength." Rasmussen dismissed calls for a drastic shift in the EU's approach, asserting the ministers' firm consensus on readiness to respond if necessary. French President Emmanuel Macron echoed this sentiment, urging a rapid implementation of countermeasures and advocating for the utilization of a previously untested law allowing the EU to enact punitive regulations against countries using trade as a coercive tool. German Chancellor Friedrich Merz warned that a 30% tariff would devastate Germany’s export industry, while the German Chamber of Commerce and Industry projected a potential decline in exports to the US by nearly $1 billion a month due to ongoing uncertainty. Merz called for a measured response, while Italy's government cautioned against escalating tensions. Concerns regarding the ramifications of a trade war were echoed by officials from Central and Eastern European nations, who feared that retaliatory measures might jeopardize US military support in the region. Lithuania’s Foreign Minister Keṣtutis Budrys emphasized the importance of avoiding escalation, particularly concerning shared issues with the US, like tackling the fentanyl crisis. While the UK has successfully negotiated a trade deal with the US, it is not immune to the repercussions of a potential trade downturn within the EU, its largest trading partner. Matthew Allen, an economist at the University of Salford, warned of significant ripple effects for UK consumers and businesses due to their strong ties to EU supply chains. He highlighted how many British firms import components from the EU for goods that are subsequently exported to the US, indicating that their operations could be adversely affected by Trump's proposed tariff hikes. Related Sources: • Source 1 • Source 2