KEY POINTS
- EU leaders warn that a trade war with the US would harm both sides.
- Macron urges the EU to stand firm if Trump imposes tariffs on European goods.
- Trump has vowed to impose new tariffs on EU imports.
- Scholz warns that a trade dispute would be damaging.
- EU vows to respond “firmly” if Trump proceeds with tariffs.
- The EU is strengthening trade ties with other nations to reduce reliance on the US.
BRUSSELS, Belgium: European leaders meeting in Brussels Monday warned there would be no winners in a trade war with the United States, insisting they would hit back if President Donald Trump imposes tariffs. The bloc warned that the trade war would harm consumers on both sides of the Atlantic.
European Union foreign policy chief Kaja Kallas said if the US and Europe started a trade war “then the one laughing on the side is China”.
“We are very interlinked. We need America, and America needs us as well,” she said, speaking ahead of an informal gathering of EU leaders in Brussels.
French President Emmanuel Macron said the European Union must show its muscle if US President Donald Trump makes good on his threat to target the bloc with a volley of tariffs.
“If we are attacked in terms of trade, Europe — as a true power — will have to stand up for itself,” Macron said.
The leaders of the EU’s 27 nations were huddling in the Belgian capital with Britain’s prime minister and the head of NATO to discuss efforts to boost Europe’s defences as Trump’s demands that American allies spend much more.
But the discussions were overshadowed by the US leader’s decision to slap tariffs on Canada, Mexico and China — with Trump threatening to target the EU next.
The European Union is feeling the heat, and many stock markets in Europe have been reacting negatively, with some shares sliding across the European continent. EU fears this could be a protracted trade war that might last beyond summer, triggering an economic recession here in Europe.
Efforts to avoid trade war
Poland’s Prime Minister Donald Tusk, whose country currently holds the EU presidency, said everything must be done to avoid a “totally unnecessary and stupid” trade war.
“Poland will for sure be a country that encourages common sense and caution. But we also have to say clearly that any plans to introduce customs and (wage) trade wars are a complete mistake,” he told journalists in Brussels.
Trump has accused the EU of treating the United States “very, very unfairly” on trade.
After slapping levies on his North American neighbours and China, Trump doubled down on Sunday by saying he “definitely” planned to target the EU in future.
German Chancellor Olaf Scholz said a trade dispute would be “bad for the US, bad for Europe”, with transatlantic “cooperation” preferable for both sides.
“We can also react,” he added, veering from Germany’s traditionally cautious approach to transatlantic trade relations.
On Sunday, the European Commission said it would retaliate “firmly” if Trump hit it and decried his sweeping measures against Canada, Mexico and China.
“Tariffs create unnecessary economic disruption and drive inflation. They are hurtful to all sides,” a commission spokesman said.
Up until then, Brussels had said it hoped to avoid a trade conflict with Trump through negotiation.
EU diversifying trading partnerships
Later European Council chief Antonio Costa held a night phone call with Canadian Prime Minister Justin Trudeau.
“Both leaders underscored the importance of the EU-Canada bilateral relationship and confirmed their determination to continue working together,” an EU official said.
Since Trump was re-elected in November, Brussels has been working to diversify its trading partnerships, announcing in recent weeks both a strengthened trade deal with Mexico and the resumption of talks on a free trade deal with Malaysia.
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Back in 2018, during his first term, Trump imposed tariffs on European steel and aluminium exports — leading the EU to respond with its own higher duties.
Possible trade wars
EU foreign policy chief Kaja Kallas emphasised the interdependence between the US and the EU, warning that a trade war would ultimately benefit China. She said there would be no winner in a trade war between the US and Europe.
Trump’s return to the presidency has reignited concerns over potential trade wars between the US and the EU.
On Sunday, US President Donald Trump told journalists that new tariffs on EU goods would “definitely happen” and could come “pretty soon.”
The Trump administration is reportedly considering imposing tariffs ranging from 10% to 20% on all EU imports and up to 100% on automobiles, citing the need to protect American jobs and address “unfair trade” practices from Europe.
His decision on Saturday to impose a 25% tariff on imports from Canada and Mexico and a 10% tariff on Chinese goods has now turned attention to what will happen in Europe.
