In a tense atmosphere of economic diplomacy, Spain's Prime Minister Pedro Sanchez emphasized that a trade war benefits neither the European Union nor the United States. His remarks came as President Donald Trump threatened to impose tariffs on EU goods entering the U.S. The situation unfolded at the World Economic Forum in Davos, Switzerland, where global leaders gathered to discuss pressing international issues.
Sanchez, speaking to CNBC's Steve Sedgwick, highlighted the interconnected nature of the U.S. and EU economies. He reiterated the importance of their transatlantic bond, stressing that escalating trade tensions could have far-reaching consequences.
"We share a strong transatlantic bond… our economies are very interlinked and I believe a trade war is not in the interest [of either party], neither for the U.S., neither for the European Union." – Pedro Sanchez
President Trump's administration has considered imposing an additional 10% tariff on Chinese imports starting in February. He justified potential tariffs on EU goods by criticizing the bloc's trade practices.
"Very, very bad to us. So they're going to be in for tariffs. It's the only way… you're going to get fairness." – President Donald Trump
The European Union, meanwhile, has been preparing to respond proportionately should the U.S. impose tariffs. Valdis Dombrovskis, the EU's commissioner for the economy, indicated that the bloc stands ready to defend its economic interests.
"If there is a need to defend our economic interests, we will be responding in a proportionate way." – Valdis Dombrovskis
The possibility of tariffs has raised concerns about global economic growth. The EU and U.S. are engaged in discussions to find a pragmatic solution, with Dombrovskis warning that Mexico and Canada might also face import duties.
"We're ready to defend our values and also our interests and rights if that becomes necessary." – Valdis Dombrovskis
At Davos, Sanchez further stated that a trade war would be detrimental to both sides.
"A trade war is a kind of a zero-sum gain." – Pedro Sanchez
The EU aims to engage in dialogue with their U.S. counterparts to avoid damaging their economic relationship. The annual World Economic Forum serves as a crucial venue for such discussions, bringing together global leaders and experts to address international economic challenges.