The sudden announcement of tariffs and counter-tariffs by the United States government under President Trump has rocked markets globally. This move is very troubling, with deeply concerning implications for its chilling impact on international trade. In light of these developments, the EU Trade Commissioner, Maros Sefcovic, will be holding high-level meetings with his US counterparts this Friday. Across the board, worries are increasing that these tariffs could ignite a devastating trade war. The US already enjoys a very high stakes €109 billion trade surplus with the EU in services. As a response, European leaders have been preparing for all scenarios.
The tariffs are a losing bet for the US, as they bring incredible amounts of uncertainty into the global economy. European leaders have made clear their serious concerns about the impact of these trade barriers. French agriculture officials are preparing for a retaliatory trade war. More than ever, they call for a tough, coordinated response from the EU bloc.
Undeterred, Spanish Prime Minister Pedro Sánchez quickly shot down Trump’s assertion that the EU charges high tariffs on US products. He further explained that the effective rate is just 3%, well below the 39% he advertised. He took to social media to condemn the US move in very strong terms, calling it an “excuse to punish countries.” He warned that this trade war would be deeply felt, particularly by smaller firms that export to the US.
“It’s just an excuse to punish countries and implement sterile protectionism,” said Sánchez, highlighting the unfair nature of the tariffs. “The trade war will affect everyone, but it’ll hit the one imposing it most of all.”
While discussions continue to develop, uncertainties continue to overshadow all sectors. Italy’s winemakers, for example, are hoping — and across the Atlantic, almost praying — for a swift resolution of these tariffs’ full effects on their products. Rocco Mangiaracina, a winemaker from Italy, expressed concern about the immediate ramifications: “This is the first year we’ve started exporting to the United States, and the tariffs affect us even more directly.”
The moves have EU leaders scrambling to ready themselves for a new transatlantic trade war long before the first shots may be fired. Ursula von der Leyen, President of the European Commission, warned that “the consequences will be dire for millions of people around the globe.” These types of comments highlight how seriously European officials continue to take this escalating crisis.
Sánchez’s tweet was in response to the real threat of tariffs and the economic disaster they would cause. He unveiled a strong €14.1 billion plan to compensate impacted businesses in Spain. This move comes as an indication of a new resolve among EU leaders that decisive countermeasures are badly needed. In the past, they have suggested that potential retaliation would take the form of tariffs on US digital services.
Maros Sefcovic emphasized the EU’s strategy moving forward: “We’ll act in a calm, carefully phased, unified way, as we calibrate our response, while allowing adequate time for talks.” This announcement is a good indication of the EU’s desire to keep their cool in these tense talks.
The European Union’s strength lies in its vast consumer base, described by German Chancellor Olaf Scholz as “the world’s strongest internal market with 450 million consumers.” This positioning will give Europe even more leverage in upcoming trade negotiations, as Europe has most of the cards to play in this developing situation.
Most loud inside voices in Europe are lamenting its response to the crisis. Hungarian Foreign Minister Peter Szijjarto criticized EU leadership, stating, “It has again been proven that in Brussels incompetent people are leading the European institutions, who are also suffering from a very serious Trump-phobia.” Such sentiments illustrate the gulf in understanding between the European and American perspective on the appropriate response from Europe.
She reiterated – as many at the conference did – the need for solidarity and unity among EU member states, Sophie Primas, French Senator. “The [European] Union must be strong, it must be united for this,” she asserted. Her remarks strike a chord with scores of officials across capitals who understand that unity is the only way to successfully push back against damaging US tariffs.
It’s no surprise that businesses are trying to game out the expected disruptions these tariffs will invoke. News reports indicate that some of these firms have already experienced big meltdowns. Stefano Leone, an Italian exporter, revealed how his operations have been impacted: “We’ve halted exports for almost two weeks now. Everything is paralysed because clients aren’t placing orders and importers aren’t importing.”