Donald Trump is putting on the pressure. He has announced that he is considering imposing 50% tariffs on goods from the EU, which would certainly trigger a proportionate response from Europe. An agreement seems distant, and we can fear for our purchasing power, which has already been severely damaged in recent years.
Donald Trump is firing on all cylinders. After threatening Apple with tariffs on the iPhone if it isn't made in the United States, he's now turning his attention to Europe. He's demanding that the EU unilaterally remove tariffs on products from across the Atlantic, without offering anything in return. If no agreement is reached, an escalation is expected between the two parties, and the ensuing trade war will have direct consequences on the price of goods and services, and therefore on our purchasing power.
“Our discussions with them are getting nowhere! That is why I recommend the imposition of 50% tariffs on the European Union starting June 1, 2025,” Trump said in a message published on his Truth Social platform.
Towards an EU-US trade war
European markets have already begun to react to Trump’s threats, with shares falling for Stellantis and Deutsche Bank.“The trade uncertainty is far from over. Every day without an agreement exposes us to serious economic damage,” said Kasper Elmgreen, chief investment officer for fixed income and equities at Nordea Asset Management, quoted by the Financial Times.
On May 22, Howard Lutnick, Secretary of Commerce, was already expressing frustration at “impossible” negotiations with the EU, which refuses to submit to the same demands that the United States has obtained from other countries. The Trump administration accuses the EU of protectionism and of having implemented food and manufacturing standards that act as a barrier to imported goods. It also criticizes sanctions and legal proceedings against American companies.
For its part, Brussels would agree to eliminate customs duties on all industrial products and certain agricultural products. There is also talk of working together on solutions to limit China's commercial influence in sectors such as steel and automotive, as well as putting in place restrictions on technology transfers to Beijing. The EU, however, does not want to hear talk of abolishing national digital taxes and VAT, or weakening digital markets legislation, which regulates major tech players.
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