Duties of 30% on imports from the EU, which US President Donald Trump is threatening to impose, will make trade between the European Union and America “virtually impossible”, according to European Trade Commissioner Maroš Šefčovič.
He said, quoted by the Financial Times, supply chains would be affected on both sides of the Atlantic. “Show me at least one industry leader who is satisfied with this tariff policy,” Shefchovich urges.
Donald Trump announced his intention to impose 30 percent tariffs on imports from Mexico and EU countries starting August 1. The announcement came at a time when Washington and Brussels were working on the parameters of a possible trade deal that would suit both sides and allow to maintain a moderate tariff schedule. As the FT writes, with his decision, the US president “confused” the EU. Several European officials told the publication’s journalists that the American negotiators had lost their understanding of the situation.
The forecast is restrained
The Donald Trump administration’s threat to impose duties of 30% on European goods creates serious risks for the economy. Goldman Sachs estimates that the new tariffs could reduce EU GDP by 0.3% and damage exports by $60 bln.
Experts note, in particular, that the new duties will be a serious blow to the European car industry. According to Bruegel Institute estimates, the increase in tariffs may lead to losses in the industry of 10 billion euros in 2026 (taking into account the growth of costs, rising prices of steel and components, etc.), and German brands such as BMW, Mercedes and Volkswagen are particularly vulnerable. It is noted that European automakers will also face increased competition from China. Some of its brands, such as BYD, are circumventing U.S. prohibitive tariffs (125%) through their plants in Mexico and Hungary, taking potential buyers.
Trump has demanded that the EU fully open its markets to U.S. goods and eliminate European customs duties. European Commission head Ursula von der Leyen called such measures “harmful to both sides,” promising that she would continue to seek a negotiated settlement. But the EU does not rule out that sooner or later, in the absence of consensus, retaliatory measures will have to be introduced. A preliminary package of counter duties on American goods totaling 72 billion euros is ready, the EU’s list of “victims” includes Boeings, cars and alcoholic beverages from the US. “Washington should not underestimate our readiness to respond. The goal is a quick solution,” German Chancellor Friedrich Merz said on the occasion.
Against the background of Trump’s threats to impose increased duties, the stock markets recorded a fall in the euro. Experts record the so-called “flight from risk” – the process when investors began to sell euros and buy U.S. dollars, considering them a safer asset in times of uncertainty. The situation is aggravated by the lack of clear signals from Brussels, which adds uncertainty to the markets.
Piero Cingar,
Euronews
© Euronews
