Ursula von der Leyen Promises Strong EU Response to Trump’s Tariff Threats

The European Union is gearing up to respond to the recent tariffs imposed by Donald Trump, which amount to 20%. This move, aimed at addressing what Trump calls unfair trade practices, could have significant ramifications for global trade. Ursula von der Leyen, president of the European Commission, stated that the EU is ready to negotiate a deal but is also preparing countermeasures if talks fail.

As part of its response, the EU is looking at imposing duties on up to €26 billion worth of U.S. goods. These measures will particularly target items related to steel and aluminum. Von der Leyen emphasized the potential for tariffs to impact consumers everywhere, raising prices on food, medicine, and transportation. She mentioned, “The global economy will massively suffer,” highlighting that a trade war wouldn’t benefit either side.

Interestingly, some EU leaders are lobbying to protect their own industries from retaliation. For instance, France wants to remove proposed tariffs on bourbon whiskey, while Ireland is making a case against dairy duties. Italy’s Prime Minister Giorgia Meloni, known for her support of Trump, has expressed the need to strike a deal to avoid escalating tensions.

Despite Trump’s claims of a 39% tariff rate from the EU, the European Commission argues this figure is misleading. It’s based on various factors like VAT rates, which can be quite high in some regions, rather than straightforward tariffs.

Recent statistics indicate that the EU exported €503 billion in goods to the U.S. in 2023, enjoying a €157 billion surplus in goods but facing a €109 billion deficit in services. Such figures reveal the complexity of the trade relationship between the two entities, one that could easily become strained further by these tariff disputes.

Expert Simon Evenett from IMD Business School points out that the EU’s reliance on U.S. military strength limits its ability to respond effectively. He cautions that retaliation might only provide a false sense of security while the real priorities—like defense and finding alternative markets—remain unaddressed.

For further insights into the effects of tariffs on economies, readers might explore this World Bank report, which highlights how trade policies impact global markets.

Check out this related article: “Understanding the New Auto Tariffs: What They Mean for America and You” | CNN Business