05/08/24

EU: EU reportedly prepares to counter potential Trump trade tariffs

As published on: malaysiasun.com, Monday 5 August, 2024. 

Reports said that if the European Union fails to negotiate with Trump's team and if the Republican administration choose to apply punitive tariffs on imported European goods, the EU would retaliate by applying tariffs of 50 percent or more on a list of selected U.S. goods.

The European Union (EU) is putting together a two-step plan to counter the possible negative impact of a universal import tax Donald Trump is planning to introduce if he gets re-elected as the U.S. president in November, according to media reports.

According to a recent report by the Financial Times (FT), the first step is to negotiate with Trump's team over which U.S. products could be bought by the EU in bigger quantities. Should this fail, and should the Republican administration choose to apply punitive tariffs on imported European goods, the EU would retaliate by applying tariffs of 50 percent or more on a list of selected U.S. goods.

The report came after Trump, during his campaign, proposed to impose 10 percent across-the-board levies on all products imported into the United States.

"We believe the United States and the EU are strategic allies and especially in the current geopolitical context, it's important that we work together on trade," said European Commissioner for Trade Valdis Dombrovskis to the FT.

"We defended our interests with tariffs and we stand ready to defend our interests again if necessary," he was quoted as saying by the newspaper.

During Trump's presidency between 2017 and 2021, the United States adopted a protectionist trade policy, which resulted in higher customs tariffs on 6.4 billion euros (6.99 billion U.S. dollars) worth of steel and aluminum imports from the EU. The European Commission responded with tariffs worth 2.8 billion euros, targeting luxury goods such as Bourbon whiskey, Harley-Davidson motorcycles, and power boats.

Under Joe Biden's presidency, the trade deficit between the United States and the EU reached 156 billion euros in 2023.

Rebalancing it will be hard, as the value of U.S. exports is much less than its imports from the EU, EU officials said to the FT. (1 euro = 1.09 U.S. dollars)

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EU Trump Trade tariffs