Tariff attacks: how should Europe defend itself?
New punitive tariffs also apply to Europe - 20 percent for EU member states. Today, Wednesday, the EU is again meeting to discuss how best to respond. Until now Brussels had played the de-escalation game, but US President Trump has rejected its offer of a free trade deal. Europe's press explores the options.
Carefully calibrated countermeasures needed
In La Tribune, three economists call for a considered approach to EU counter-tariffs:
“Take US-manufactured means of transport. A 20 percent increase in import duties on these products would reduce their sales in Europe by more than 40 percent. This corresponds to a reduction of over seven billion euros in US imports. According to estimates, these vehicles would be replaced by EU-produced equivalents worth five billion. ... On the other hand, raising tariffs on food and beverages would have a comparatively small impact, as the trade balance would improve by only around 1.5 billion as a result of a reduction in US imports. By optimising the selection of taxed US products the negative effects of the tariff measures announced by Donald Trump can be significantly reduced for Europe. An important trump card for future negotiations.”
High probability of rifts within Europe
Of course a resolute response is important but, as Hospodářské noviny stresses:
“It is complicated - because developing an appropriate response will divide rather than unite the individual EU member states. Each state will be vying for an EU response that reflects its own priorities, which in many cases diverge fundamentally. The French have already insisted that American bourbon be exempt from the retaliatory measures because Trump has threatened to impose a 200 percent tariff on European alcohol.”
Boycotting is complicated
Boycotting US goods could make perfect sense, writes the taz:
“The plummeting sales figures and share price of Musk's EV manufacturer Tesla illustrate this. If consumers stop ordering from Amazon, it will hurt Jeff Bezos and at some point the damage will also hit Trump. To make sure it does, the cutback in consumption must hurt the right people, including bourbon manufacturers, Musk and Bezos, who all back Trump. There are borderline cases though. What about nuts from California, a state that wants to stand up to Trump? However, if the goal of boycotting US manufacturers that produce in Europe is simply to replace their products with ones produced in Germany this is unappetising because it’s nationalistic. Critical consumerism is complicated.”
As volatile as in the 1930s
For Kauppalehti, the situation does not bode well:
“The question is what the world would look like if the US, defender of the free market and multilateral trade, were to wash its hands of the entire system. It would be the end of globalisation in its current form. The system based on the rules of the World Trade Organisation (WTO) would be replaced by a new one. We would enter an era that is even more arbitrary and protectionist. A much more dangerous world than the one of recent decades. The last time we had a situation like this was in the 1930s, which ended in World War II. The danger of a full-blown trade war is real.”
Canada should join the EU
Gemany's former finance minister and foreign minister Sigmar Gabriel recently proposed that Canada be invited to join the EU. Jydske Vestkysten loves the idea:
“Community is not just about geography, it's also about culture and mentality. In this respect Canada is a lot closer to us than it is to the US. For Europe, this North American country would literally be a gigantic asset. ... For Canada, in view of the madness that has overtaken the US, it could be tempting to become closer friends with Europe. After all, the US wants to annex its neighbour, just as it wants to gobble up Greenland.”
Everyone loses if this escalates
Slovenia's former economics minister, Matej Lahovnik, warns in Slovenske novice against getting caught in a tariff spiral:
“As long as they remain a threat, no one gets hurt. But once they are implemented, there will be catastrophic fallout on all sides. .... Higher tariffs mean more expensive imports, which leads to higher inflation and lower growth. It's as if one person shoots another in the knee and that person shoots back. The result is that both end up limping, and this is exactly what will happen all over the world if a tariff war breaks out. And we consumers will end up paying for it.”
Let him fall on his own sword
EU should keep a cool head because tariffs would impact its own citizens first, advises De Volkskrant:
“The pain they feel in their wallets could intensify the criticism of Trump, but it could also fuel anger towards Trump's opponents and the desire to punish them. The best strategy right now seems to be to let Trump fall on his own sword and not be too quick to impose import tariffs ourselves because our own citizens will hit hardest in the short term.”
Time for the digital tax
Brussels has a trump card to play against Trump, notes the Tagesspiegel:
“Or at least against those who threw themselves at him before and during his inauguration - the US tech giants. Amazon, Meta, Google and Co. earn around half their profits in the EU. A digital tax or punitive measures would hit them directly and hard. Never before has the matter been so openly talked about in the EU. Jeff Bezos, Mark Zuckerberg, Sundar Pichai and other Trump-loving CEOs will want to prevent this happening at all cost. Particularly because their companies have lost billions during the short time Trump has been in office. ... It's time they used their influence. ”
Don't put united front at risk
The Tages-Anzeiger cautions against a panicked reaction to the tariff threats:
“For the time being, all the EU needs to do is impose retaliatory tariffs in line with WTO rules and show willingness to negotiate with Trump. The idea being floated by some EU states to hit back at the big US tech companies would be counterproductive. Trump would retaliate immediately by slapping 200 percent tariffs on champagne, for example, as he has already threatened to do. This would put France in a tailspin and severely jeopardize the EU's united front against the US. There are already very different opinions within the bloc about how to respond to Trump's tariffs.”
The EU and the role of prudence
The EU's much-maligned slow decision-making process should not always be seen as a disadvantage, writes Público:
“Donald Trump has emerged from a society of instant gratification, of constant stimuli in which the real and the constructed merge - to produce a film in which common sense and moderation do not play a role. ... The compromise that the European Union represents, the system of negotiations and agreements in world trade, the rules of democracy itself are certainly boring compared to men like Trump. History has shown that these are the best guarantees for the happiness of most people, but truth is having a hard time these days.”
Internal resistance is our only hope
According to Berlingske, there is little that can be done about the Trump phenomenon from the outside:
“If you play golf while the world burns, you show your contempt for everyone who is literally begging Trump not to plunge the US and the world into deep crisis. Trump's actions are torpedoing the 80-year struggle for a rules-based global economy. Europe and China can apparently do nothing. Trump has declared the whole world to be the enemy of America. ... The only chance to save the world from catastrophe is for the US itself to rebel - from Congress and the business community to ordinary Americans.”