Newly elected US President Donald Trump has announced a new course in trade policy. He is threatening to impose high tariffs on imported products, mainly targeting countries with large export flows to the United States. This could have far-reaching consequences for the global economy and lead to tense trade relations.
Trump argues that trade agreements in the past have been concluded too much to the advantage of foreign partners. The president points in particular to Canada, Mexico and the European Union as parties that, according to him, have too easy access to the American market. To correct this, he wants to impose high import tariffs. In doing so, he also wants to protect American producers.
Analysts see this as a sign of protectionism and possibly higher import duties. That could lead to market disruptions on the international stage. Trump has long criticized what he describes as "unfair trade practices."
Critics question the effectiveness of higher tariffs. They argue that consumers ultimately foot the bill because companies pass on the extra import costs in the selling price. Moreover, increased protectionism could lead to the European Union and other trading partners raising their import tariffs or taking other retaliatory measures.
For the EU, the threat of higher US import duties is a significant challenge. The internal market is heavily dependent on exports, particularly in sectors such as agriculture and manufacturing. Other sectors, such as aerospace, high-tech and pharmaceuticals, are also concerned.
At the political level, there are divisions within the EU over the appropriate response. Some want to use diplomatic means to defuse tensions, while others advocate a forceful response, such as raising tariffs on US products themselves. Combined, the EU could show that it is prepared to defend its internal market.
European leaders, including Commission President Ursula von der Leyen, have indicated that they are prepared to hold talks. It is still unclear whether Trump will carry out his threats. Next week, a EU summit of heads of government will be held in Brussels, with two major agenda items: tackling the Russian war in Ukraine, and preventing a trade war with the Americans.