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The EU has said it regrets US President Donald Trump’s decision to hit Canada, Mexico and China with sweeping tariffs, and said it would respond firmly if a threat to expand the trade measures to Europe was fulfilled.
Trump sparked a global trade war this weekend in announcing the measures against three of the US’s largest trading partners after the EU, which has the largest trade deficit with Washington. The Trump administration has so far refrained from imposing tariffs on the EU despite the US president saying on Friday that he would “absolutely” do so.
A spokesperson for the EU’s executive said that the bloc’s trade and investment relationship with the US was the biggest in the world, adding: “There is a lot at stake.”
“Across-the-board tariff measures raise business costs, harm workers and consumers,” the spokesperson said. “Tariffs create unnecessary economic disruption and drive inflation. They are hurtful to all sides.”
“At this time, we are not aware of any additional tariffs being imposed on EU products,” the Commission said on Sunday. “However, the EU would respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs on EU goods.”
EU officials began drawing up contingency plans for a Trump trade war last summer.
The initial approach was to negotiate areas where the EU could buy more US products, such as liquefied natural gas, and narrow the trade deficit that the president regularly decries. Some capitals are also banking on pledges to increase their national defence spending in a bid to appease Trump, who wants Nato members to spend 5 per cent of GDP on their military.
Should all those efforts fail, the Commission’s trade department has spent months drawing up lists of US imports it could hit with duties of 50 per cent or more. Brussels it has kept details of those retaliatory measures secret in order not to provoke Trump.
With confirmation hearings for Trump appointees ongoing in Washington, the EU’s trade commissioner, Maroš Šefčovič, “stands ready to engage as soon as his counterparts are confirmed”, said an EU official.
Klaas Knot, a member of the governing council of the European Central Bank, said on Sunday that he expected countries to retaliate against US measures and exacerbate a trade war that would damage all sides.
“Europe will not want to be pushed around. We are also a powerful trade bloc with 400mn consumers,” Knot, who is president of the Netherlands’ central bank, told Dutch television on Sunday.
Trump imposed the blanket tariffs against Canada and Mexico by invoking the International Emergency Economic Powers Act, which allows him to take measures in response to “an unusual and extraordinary threat.”
He would need to find justification to potentially use the same tool against the EU, or use tariffs targeting certain industrial sectors on security grounds, as he did during his first presidency.
