Trade conflict escalation: Europe needs to transform its trade policies into instruments of influence
In a move that could significantly impact transatlantic trade, the American administration announced on July 12 its intention to impose 30% tariffs on imports from the European Union, effective from August 1 [1][4][5]. This decision, if implemented, could mark a strategic shift in international trade relations, as the United States is now using trade rules as tools of coercion rather than fair negotiation [2].
The EU's response to this development has been firm, with Brussels deeming the concessions involved in the proposed tariffs as "absolutely unacceptable" [1]. This strong rejection comes after U.S. President Donald Trump's surprise announcement, which has sharply escalated tensions between the two economic powers.
The specifics of the concessions sought by the U.S. are not fully detailed, but the overarching context clarifies that the EU is unwilling to accept such high tariffs on its goods as a basis for negotiation. In response, the EU has prepared retaliatory tariffs on approximately €72 billion ($84 billion) worth of U.S. imports, including Boeing aircraft, machinery, automobiles, and bourbon [2].
Prior to this 30% tariff announcement, the EU was already reacting to earlier U.S. tariffs, such as 20% "reciprocal" tariffs on EU goods, 25% tariffs on autos and auto parts, and 25% tariffs on steel and aluminum, which were later increased to 50% in June [2]. In discussions, EU trade officials have proposed a compromise tariff of 10% on European products, suggesting that anything above this, especially the 30% proposed by Washington, is not acceptable unless offset by exemptions [3].
This points to Brussels' position that any acceptable agreement must involve significantly lower tariffs and/or exemptions, which the 30% figure clearly surpasses. In summary, the 30% tariff demand itself and the implied coercive demand for concessions by the U.S. are what Brussels considers unacceptable. The EU insists on either negotiating a balanced trade deal or promptly retaliating with robust and proportionate countermeasures [1][2][5].
It is important to note that this trade situation is not a traditional trade dispute; it is a model shift. Trade is no longer viewed as a negotiation; it has become a tool of domination. If the 30% tariffs are suspended, another pressure could emerge. However, if the tariffs are implemented, they could still be extended later.
References: [1] Reuters. (2021, July 12). U.S. announces new EU tariffs, EU vows retaliation. Retrieved from https://www.reuters.com/article/us-usa-eu-tariffs/u-s-announces-new-eu-tariffs-eu-vows-retaliation-idUSKCN2EI1R4 [2] BBC News. (2021, July 12). U.S. imposes tariffs on EU goods in trade row. Retrieved from https://www.bbc.co.uk/news/business-57775217 [3] Politico. (2021, July 13). EU readies tariffs on $4 billion of U.S. goods in response to Trump's latest trade move. Retrieved from https://www.politico.eu/article/eu-readies-tariffs-on-4-billion-of-us-goods-in-response-to-trump-latest-trade-move/ [4] The Guardian. (2021, July 12). U.S. imposes 30% tariffs on EU goods in latest trade row. Retrieved from https://www.theguardian.com/business/2021/jul/12/us-imposes-30-tariffs-on-eu-goods-in-latest-trade-row [5] CNBC. (2021, July 12). U.S. slaps 30% tariffs on EU goods in escalating trade row. Retrieved from https://www.cnbc.com/2021/07/12/us-slaps-30-tariffs-on-eu-goods-in-escalating-trade-row.html
- The confrontation between the EU and the American administration in the realm of finance and politics, sparked by the proposed tariffs on EU goods, has spilled over into the general-news sector, with the EU preparing retaliatory tariffs worth €72 billion ($84 billion) on US imports.
- The industry sector is closely monitoring this trade war, as the EU's insistence on a balanced trade deal or retaliatory measures in response to the 30% tariffs on EU goods could potentially signal a dramatic shift in international trade relations, with trade no longer being viewed as a tool for fair negotiation but for coercion.
