Europe warns of trade war: Are Trump's tariffs a serious threat?

Europe warns of trade war: Are Trump's tariffs a serious threat?

Trade relations between the USA and the European Union are on the verge of an explosive escalation. How oe24.at reports, European leaders have serious concerns about the threat of US President Donald Trump imposing import tariffs. During an informal EU summit in Brussels, interim chancellor Alexander Schallenberg warned that all sides would be negatively affected by a trade war that could, in the worst case, favor China. However, Schallenberg stressed the EU's determination to protect its economic interests.

US President Trump announced on Sunday that the imposition of tariffs on European products could be imminent in the near future in what he says is a massive trade deficit of around $300 billion with the EU. German manufacturers would be particularly affected, as Trump is particularly focusing on the automotive sector and European foods such as champagne. He accused the EU of “exploiting” the USA and called for a drastic revision of trade agreements. Loud daily news the EU could be forced to take appropriate countermeasures. Chancellor Olaf Scholz emphasized that Europe is able to react to US tariffs and thus defend its own market position.

Immediate consequences of customs policy

The threat of tariffs, which are already becoming a reality, particularly against countries such as Mexico and Canada, have already led to backlash. Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum announced retaliatory tariffs of 25 percent. The rapidly falling demand from these countries could also have an impact on the European market, as they could have less demand as buyers for European products. Illnesses in the automotive industry are a worrying consequence that could affect even large manufacturers such as VW and BMW. The head of the French central bank, Francois Villeroy de Galhau, warned of the danger that this situation could further increase economic uncertainty in Europe.

To address the looming crisis, the EU hinted at possible measures, including increased imports of US raw materials such as oil and gas, to ease tensions. At the same time, the EU wants to take a position and make it clear that unfair trading practices are unacceptable. The focus is on developing a unified strategy to strengthen the European Union and find a response to Trump's aggressive tariffs that could threaten economic ties.