The European Union is scrambling to respond to US President Donald Trump’s threat of tariffs against the bloc, with leaders warning of a “totally unnecessary and stupid” commercial conflict. Polish Prime Minister Donald Tusk has called for caution, while German Chancellor Olaf Scholz said Europe has the capacity to react if Trump follows through.
The EU is also preparing to meet in Warsaw today to strike a unified position on its response to US trade threats, with Commission President Ursula von der Leyen set to discuss allowing member states more flexibility to use extra debt to finance defense spending. Meanwhile, EU regulators are launching an investigation into Chinese marketplace giant Shein over allegations of selling illegal products.
The euro has struggled to maintain parity with the US dollar, and economists believe it will fall further as fresh US tariffs loom large. Investors representing €6.6 trillion in assets have warned against scaling back sustainability standards, while a report reveals Raiffeisen Bank’s clients are making money from firms supplying Russia’s military.
The EU is also bracing for challenges ahead of Brexit, with UK Prime Minister Theresa May’s comments suggesting the bloc may be spared tariffs due to their “special relationship.” The comments highlight how Brexit could finally bring some benefits, even if it remains at the mercy of a one-sided relationship that has been in place for decades.
Source: https://www.bloomberg.com/news/newsletters/2025-02-04/eu-struggles-with-response-to-trump-s-trade-threats