Commercial dispute: Great uncertainty – which Europe fears with new US tariffs

US President Donald Trump celebrates it as a day of liberation, for Europeans it should be the next escalation level in the trade dispute with the USA: Trump wants to impose new tariffs on Wednesday. For weeks, the Republican has been looking forward to the “Liberation Day” for the USA he has described it and scolds the European Union. It is a thorn in the side of him that European companies sell significantly more goods in the United States than American companies in the EU.

It’s not really clear. Trump speaks of mutual tariffs. In principle, this means that the United States raises tariffs wherever you are currently asking less than its trading partners. Trump also announced that there are other trade barriers – such as strict import guidelines or subsidies. He wants to correct the retail weight and strengthen the USA as a production location. Other countries accused of treating his country unfairly. At the same time, the tariffs are likely to help him to focus on his costly election promise of comprehensive tax cuts.

Finally, it indicated that the 78-year-old could simply impose a flat-rate tariff. This would mean that the taxes would not be limited to individual goods or specific industries. No state will be spared from the tariffs, he said about the weekend. On Monday evening he talked about US trade partners in the White House and complained: “In many cases, the friend is worse than the enemy.” He wants to announce exactly how the new tariffs look and who they meet in the rose garden of the White House.

He recently demonstrated that Trump is serious about his threats. He already imposed tariffs on all aluminum and steel imports, brought tariffs on imported cars and auto parts, introduced increased tariffs to all goods from China and targeted its neighbors Canada and Mexico.

In Brussels, the worst is now expected – that is, that Trump could impose a flat -rate additional duties of 20 or even 25 percent on all imports from Europe. Still uncomfortable, but overall economy not quite as consequence would be targeted tariffs on certain products or product groups. As a possible goal for this, EU exports of medicines, wood, copper or semiconductors were recently mentioned.

What does that mean for the German economy?

The United States is Germany’s important trading partners ahead of China and the Netherlands, as data from the Federal Statistical Office show. According to this, 2024 were worth around 253 billion euros between Germany and the United States.

The US market has become more important for German companies: For German exporters, the United States is more important than ever in the past 20 years, according to the Federal Statistical Office. In 2024, German companies were worth 161.4 billion euros to the United States, a good ten percent of all exports.

Conversely, in 2024, goods worth 91.4 billion euros were imported from America to Germany. The result was a German record surplus of around 70 billion euros with the United States. With no other country, Germany has had such high export surpluses since 2017.

Which industries are particularly dependent on the USA?

Not only the German carmakers threaten the special tariffs of 25 percent high loads already announced by Trump. New US tariffs are also dangerous for the pharmaceutical industry. Medicines worth 26 billion euros and thus almost a quarter (23.2 percent) of German pharmaceutical exports went to the USA in 2023. From a percentage, this is even more than in mechanical engineering (13 percent) and the chemical industry (7.2 percent), whose products are also among the most important German export goods in the USA.

Could the tariffs have consequences for health care in Germany?

Germany imported 2023 pharmaceuticals worth 12.5 billion euros (17 percent) from the USA and around twelve percent of the preliminary products. These are materials, fabrics or components used in the manufacture of medical devices, medicines or medical devices. “In an emergency of a trade war, preliminary products could be stronger or at times completely missing,” says Claus Michelsen, chief economist at the association of researching pharmaceutical manufacturers. “This would put drug production in Germany under pressure with consequences for medication supply and the employees in pharmaceutical production.”

How could German companies react to the new tariffs?

There are horror scenarios that German companies could migrate to the USA on a large scale to avoid tariffs. Simone Menne, President of the American Chamber of Commerce in Germany (Amcham Germany), sees high hurdles for companies. “Large investments have years of lead to migrate from Germany would be associated with high costs for companies,” said Menne in an earlier conversation with the dpa.

Many German corporations are already strong in the USA, said Menne. “Maybe more invest even more on site.” German companies are important employers and investors in the United States, show data from the Federal Ministry of Economics. Among other things, the carmakers VW, BMW and Mercedes have large works there. The middle class has a harder time, said Menne. “Many companies are world market leaders from Germany, they cannot simply build up a work somewhere else overnight.”

How will the EU react?

EU Commission President Ursula von der Leyen sees considerable dangers. Specifically, it predicts rising prices, problems in supply chains and the risk of job losses. The EU Commission, which is responsible for European trade policy, is ready to talk until the end. In the event that the United States does not come to the negotiating table, it wants to strike back. A spokesman last said in Brussels that countermeasures with “maximum effect” were prepared.

In order to make concrete calculations difficult for the US President, the EU is silent. It has already been announced that the special tariffs currently exposed to US products such as jeans, bourbon whiskey, motorcycles and peanut butter will be reintroduced in mid-April. However, this is the response to the special US pens to steel and aluminum imports that have already come into force. Additional measures are likely to take numerous other US goods.

Could the EU’s services also be targeted by Trump friend Elon Musk?

The EU Commission argues that the United States sells more services to the EU than vice versa. The main reason is the big American tech companies. If you take into account goods and services, there is only a small surplus of 48 billion euros, according to the Commission. That corresponds to three percent of the total trade between the USA and the EU.

From the European Parliament there are already demands for a threat of measures against American companies such as the platform X, which Musk belongs, Google, Amazon or Netflix. The chairman of the trade committee in the European Parliament, Bernd Lange (SPD), considers it possible, for example, to raise taxes on digital services.

How could it go on after the new customs announcement?

In a less bad scenario, Trump could quickly be convinced to temporarily suspend the tariffs – and then start negotiations. In the worst-case scenario there would be a long trade war-with difficult consequences for the economy. Even in the case of negotiations, however, it is not expected that in the end everything is like before.

What could the EU offer the United States in negotiations?

In addition to customs cuts on goods such as US cars, new agreements are an option. According to the EU Commission, the European Union and Trump could conclude a new deal to expand American exports of LPG (LNG). “We still get a lot of LNG from Russia, so why not use American LNG instead, which is cheaper for us and lowers our energy prices,” said Ursula von der Leyen last year. It would also be possible to import more military technology and agricultural goods from the USA.