Europe is facing significant economic challenges under Donald Trump’s presidency, affecting its car industry, energy supply, and the euro’s devaluation. The EU has prepared for Trump’s policies, which could reshape the eurozone’s economic landscape.
Tariffs on Chinese goods and imports from other countries are expected, with 60% tariffs on China and 10-20% on others. This poses a threat to Germany’s economy, as well as its car industry, which could face further strain due to a potential 10% tariff. European car makers’ stocks plummeted after Trump announced additional tariffs on Canada and Mexico.
The EU may increase oil and gas purchases from the US to mitigate tariff threats. However, this strategy faces challenges related to climate change and capacity constraints. Trump has urged the EU to buy more American oil and gas to avoid tariffs.
A potential Ukraine war could lead to higher energy prices, influenced by Trump’s decisions on sanctions. A trade war with the rest of the world is expected to cause inflation, as higher import costs would be passed on to consumers.
While a further devaluation of the euro might offset some impact, it would make imported goods more expensive, and a surge in energy prices could exacerbate inflationary pressures.
Source: https://www.euronews.com/business/2025/01/20/trumps-inauguration-day-the-eu-waits-to-see-whats-in-store