US President Donald Trump has intensified his threat to impose punitive tariffs on the 27 member states of the European Union, following a recent trade agreement with Canada and Mexico. The EU is considered the next target in Trump’s escalating trade war strategy.
The US has significant trade deficits with the EU, similar to those with Canada and Mexico. Agathe Demarais, senior policy fellow at the European Council on Foreign Relations, attributes Trump’s focus on these countries to his obsession with trade deficits.
Trump has criticized the EU for its trade practices, labeling them an “atrocity.” However, tariffs imposed by both the US and EU on each other are similar in level. The US imposes a 3.95% tariff on imported goods from the EU, while the EU levies a 3.5% tariff on US exports.
The EU is the largest buyer of US goods, accounting for nearly 20% of total imports in 2023. However, there is a $107 billion deficit in services and a $160 billion surplus in goods.
European leaders have expressed concern over the potential tariffs, with Denmark’s Prime Minister Mette Frederiksen stating that fighting allies would be “never supported.” Poland’s Prime Minister Donald Tusk has warned of the need to avoid an unnecessary tariff war or trade wars.
Business leaders, including those from Germany and the US Chamber of Commerce to the EU, have warned that tariffs could slow investment and hurt companies on both sides. A 1.2 million jobs in Germany are dependent on exports to the US, and up to 300,000 could be endangered if tariffs against Europe come into effect.
The EU luxury industry is also bracing for a potential hit from US tariffs, which have previously targeted French wines, Italian cheeses, and luxury leather handbags and luggage.
Source: https://www.nytimes.com/2025/02/03/business/economy/trump-tariffs-european-union.html