Following the imposition of tariffs on China, Canada, and Mexico, US President Donald Trump has declared that the European Union (EU) will face similar trade restrictions.
Speaking to the BBC, Trump unequivocally stated that tariffs on the EU are inevitable, while hinting at the possibility of a separate trade deal with the United Kingdom.
On Tuesday, the US administration imposed a 25% tariff on imports from Canada and Mexico, adding to the duties recently levied on Chinese goods.
The move has already begun reverberating across global financial markets, with Asian and European stocks showing signs of decline. The automotive sector, in particular, has been adversely affected.
Trump has justified the tariffs on various grounds, including the influx of fentanyl and other narcotics into the US, as well as border security concerns.
His stance has been met with firm opposition from China, Mexico, and Canada, all of whom have condemned the measures. Both Canada and Mexico are reportedly considering retaliatory tariffs on US goods.
Despite international criticism, Trump enjoys strong support within his Republican Party.
Vice President JD Vance defended the decision, stating on social media that Mexico has been responsible for sending vast amounts of fentanyl into the US, while similar concerns have been raised about drug trafficking across the Canadian border.
House Speaker Mike Johnson praised Trump’s leadership, asserting that the tariffs should have been implemented earlier. Congresswoman Marjorie Taylor Greene also endorsed the move, describing tariffs as a "proven and powerful tool for safeguarding national interests."
However, not all Republicans are in agreement. Senate Minority Leader Mitch McConnell has cautioned that the tariffs will increase the cost of living for American citizens.
He further questioned the wisdom of engaging in economic disputes with key allies.
Germany Poised to Face the Hardest Blow
The EU’s trade relationship with the US has strengthened over the past year, with several member states exporting more goods to America in 2023 than in the previous year.
According to Eurostat, Germany, Italy, and Ireland saw a surge in exports to the US, with Germany leading the pack.
Given its heavy reliance on automobile and machinery exports, Germany stands to suffer the most from Trump’s proposed tariffs. The US president has repeatedly criticised the EU for exporting significantly more vehicles to the US than it imports in return.
Trump remains convinced that these tariffs will bolster the American economy, create jobs, and increase tax revenues. However, economists warn that such protectionist measures could have adverse effects on both businesses and consumers, driving up prices across US markets.
Beyond trade, the US has been pushing the EU to increase its purchase of American oil and liquefied natural gas (LNG). Since the EU’s pivot away from Russian energy, the US has emerged as its largest LNG supplier—a trend Washington appears keen to cement further.
