The European Union has vowed to retaliate after the US president shared plans to hit the 27-member bloc with a 25% tariff on goods in the near future.
The European Union (EU) has responded strongly to claims made by Donald Trump that the 27-member bloc was designed to “screw” the United States, vowing to fight back against the president’s proposed 25% tariffs on EU goods.
Addressing the media following his first cabinet meeting on Wednesday, Trump indicated that the EU was firmly in his sights. The president went on to say that he would release more details about his future tariff plans shortly.
Bloomberg estimates that Trump’s tariffs could affect $29.3 billion in EU exports, while many economists have warned that the plans risk hurting the US economy. These latest remarks also place an added strain on US-EU relations, with EU leaders quick to denounce Trump’s tariff threat.
What did President Trump say about imposing EU Tariffs?
Trump told reporters he had made up his mind on EU tariffs. He said:
“We have made a decision, we’ll be announcing it very soon and it will be 25% generally speaking and that will be on cars and all other things.”
The president compared the EU to Canada, calling it a “different kind of case”, saying the bloc had “really taken advantage” of the US. Doubling down on his criticism, Trump remarked: “Let’s be honest, the European Union was formed in order to screw the United States, that’s the purpose of it, and they’ve done a good job of it, but now I’m president.”
Despite details being in short supply, the comments have increased fears of a potential trade war with the EU. Asked about his potential response to future EU retaliation, Trump said: “They can’t, I mean, they can try, but they can’t. They can retaliate, but it cannot be a successful retaliation, because we just go cold turkey, we don’t buy anymore. If that happens, we win.”
How has the EU responded?
In response, EU officials have been on the counteroffensive, rejecting the president’s claims out of hand. A European Commission spokesperson said: “The European Union is the world’s largest free market. And it has been a boon for the United States.”
The statement added:
“The EU will react firmly and immediately against unjustified barriers to free and fair trade, including when tariffs are used to challenge legal and non-discriminatory policies.”
French President Emmanuel Macron, fresh from a recent meeting with Trump, shared his thoughts with Fox News, saying: “Come on, you cannot have a trade war with China and Europe at the same time. I hope I convinced him.”
Posting on X, Polish prime minister Donald Tusk said: “The EU wasn’t formed to screw anyone. Quite the opposite. It was formed to maintain peace, to build respect among our nations, to create free and fair trade, and to strengthen our transatlantic friendship. As simple as that.”
The general consensus among EU representatives is that the creation of a regional market has streamlined the process for American firms doing business in Europe, as opposed to complicating it.
How did the markets react to Trump’s Tariff plan?
On Thursday, European shares pulled back from record highs, led by declines in the automaker sector as investors assessed the effects of potential US tariffs on the EU. The pan-European Stoxx 600 index closed 0.5% lower after peaking on Wednesday.
Meanwhile, an index of European automakers and component makers decreased by more than 3.7%, while Stellantis fell 5.2%, BMW lost 3.8%, and Porsche was down 3.3%. Ferrari was the biggest loser of the day, falling 7.9% after Exor sold around 4% of its stake in the luxury Italian carmaker for €3 billion.
The sector is braced for further bad news from across the Atlantic, as the US weighs up its tariff proposals. This comes as the president also confirmed that US tariffs on China, Mexico, and Canada will proceed as planned on 3 March.
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