Impending tariffs on EU products: EU is preparing for a possible trade war with the United States

The EU is preparing for a possible trade war with the USA. After the announcement by US President Donald Trump on new tariffs on imports from Mexico, Canada and China, European heads of state and government were determined at a summit in Brussels not to simply accept comparable decisions against the EU.

Chancellor Olaf Scholz (SPD) warned as a strong economic area. “We will and will do that.” Luxembourg’s head of government Luc Frieden and France President Emmanuel Macron said similarly: “We are not weaker than the United States. Macron emphasized that when Europe is attacked at trading topics, one had to get respect.

Trump: This will definitely happen

Trump had made it clear shortly before that he undoubtedly also wanted to impose tariffs on imports from the EU. “This will definitely happen for the European Union,” said Trump on Sunday evening (local time) near Washington. Trump did not provide any specific information about the tariffs and possibly affected product groups. There is no schedule, but “pretty soon” will happen.

Diplomats said that the European Commission led by Ursula von der Leyen had prepared a list of US products a long time ago, which in the case of new US tariffs against the EU could also be raised. During the first term of trump, the EU had reacted to new taxes on steel and aluminum products with special tariffs on Bourbon Whiskey, Harley-Davidson motorcycles and jeans.

EU emphasized willingness to negotiate

Now the threat of Trump is in the room to improve all imports from the EU additional tariffs in a double -digit amount. The Republican wants to strengthen the production site in the USA and reduce the trade deficit. Trump is a thorn in the side that European companies sell significantly more goods in the United States than American companies in the EU.

For similar reasons, the US President had imports from the neighboring countries Mexico and Canada duties in the amount of 25 percent at the weekend-only energy imports from Canada are excluded, which are only due to 10 percent surcharges. An additional 10 percent are due on all imports from China.

After a phone call between Trump and Mexico President Claudia Sheinbaum, both announced that the announced tariffs on all Mexican products would be suspended for a month. Mexico has promised to strengthen his northern border with 10,000 soldiers of the national guard in order to curb drug trafficking and migration, Trump explained.

In addition to the retaliatory customs threats, EU top representatives once again emphasized the EU’s willingness to negotiate and pointed out the risks of a possible trade war for the United States. The Austrian Chancellor Alexander Schallenberg warned that in a trade war between the EU and the United States, China would become a “laughing third party”.

The EU foreign commissioner Kaja Kallas said that transatlantic trade and investments secured more than 16 million jobs on both sides of the Atlantic and made 42 percent of global economic output. “We need America and America needs us,” she said.

Therefore, the EU has long been discussing which offers Trump could be made. For example, it is conceivable that the EU could import more liquid gas (LNG), military technology and agricultural goods from the USA in order to reduce the trade deficit. It would also be possible to lower the import tariffs for US cars.

Commercial war danger overshadows other topics at the summit

The actual main theme at the informal summit in Brussels were possible joint initiatives to expand the defense skills and the question of how necessary investments should be financed. In view of the threats of Russia, several states are open to the inclusion of new joint debts. Germany, the Netherlands and Austria in particular, reject this.

Chancellor Scholz made it clear that in his view, for example, strict competitive rules could be relaxed in order to increase the performance of the European armaments industry. “The companies have to be exempt from all the legal rules that affect their cooperation. The states must be able to join purchasing processes of other countries without new purchasing procedures,” he said. It takes less bureaucracy and more determination.

France’s President Macron emphasized that European industry should primarily benefit in all future investments in order to strategically independent the EU in the field of defense.

Dispute over defense financing

The expansion of armor financing by the European Investment Bank (EIB) is also seen as a possible compromise in the upgrade debate. In addition, a program is also under discussion in which the EU Commission for Member States organizes loans on favorable conditions. With such a program, the Commission also supported national short-working regulations in the Corona crisis.

The EU Commission estimates show what dimensions it is. Last summer she assumed that additional defense investments of around 500 billion euros will be required in the next ten years. A European air defense system and an increased securing of the eastern land border of the Union are considered possible EU projects, for example.

Invitation letters Information from the EU for the meeting