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escalating trade dispute between US and EU resurfaces, as Europe responds to Trump's aggressive stance with countermeasures

U.S. President recently hinted at imposing tariffs on allies as well as a prosperous domestic company - Apple. Such threat has sparked a negative market response.

U.S. President recently issued threats of tariffs towards long-standing allies, along with a...
U.S. President recently issued threats of tariffs towards long-standing allies, along with a surprise announcement aiming a levy at one of America's top-performing corporations: Apple. Financial markets have shown significant disapproval upon hearing this news.

escalating trade dispute between US and EU resurfaces, as Europe responds to Trump's aggressive stance with countermeasures

US-EU Trade Tensions Escalate as Trump Threatens Fresh Tariffs

Fears of a trade war between the United States and the European Union have resurfaced following Europe's refusal to back down in the face of Donald Trump's latest tariff threats.

The issue of tariffs has been a recurring theme during Trump's second term, with the president frequently using it as a political tool. Last month, he imposed tariffs on several trade partners during the so-called "liberation day."

On Friday, Trump threatened to impose a 50% tariff on the EU, claiming that trade talks with Brussels were "going nowhere." This came after a period of relative calm, during which a deal was struck with the UK.

The EU has consistently taken issue with Trump's hostile rhetoric, with EU trade chief Maros Sefcovic asserting that EU-US trade must be guided by mutual respect, not threats. He added that the EU stood ready to defend its interests.

Other EU leaders and ministers have also emphasized their resolve. Polish deputy economy minister Michal Baranowski described the tariffs as a negotiating ploy, while Dutch prime minister Dick Schoof stated that tariffs "can go up and down." French trade minister Laurent Saint-Martin expressed that the latest threats did nothing to help the trade talks, stressing the need for de-escalation, but warning that the EU was prepared to respond.

Following Trump's comments, major stock indices tumbled. He also threatened a 25% tariff on US tech giant Apple, after expressing a desire for the company's iPhones to be built in America. The majority of Apple's phones are currently produced in China, with some production also shifted to India.

Previous trade disputes between the U.S. and EU have resulted in a 25% tariff on EU aluminum, steel, and cars, along with a 10% tariff on all EU imports. The EU has retaliated with a 20% tariff. However, there is a debate over the trade deficit figures, with the U.S. claiming a deficit of over $250 million annually, while the EU argues that there is a trade surplus of no more than €50 billion when considering services.

The trade tension between the two economic powers may have significant economic repercussions. The European Commission has downgraded its growth estimates for 2025, with the euro area now expected to grow by 0.9%, and the EU by 1.1%. The global trade pattern and economic aggregates could also be affected, potentially altering global value chains.

  1. The escalating trade war between the US and EU, prompted by Donald Trump's threats of fresh tariffs, has raised concerns about potential war-and-conflicts in the industry sector.
  2. The escalation of trade tensions has also entered the realm of policy-and-legislation, with EU leaders and ministers emphasizing their resolve to defend their interests in light of Trump's hostile rhetoric.
  3. In the world of finance, the stock indices have tumbled following Trump's threats, indicating a general-news trend of economic uncertainty due to these trade disputes.
  4. Energy markets may also be affected as the trade tensions between the US and EU escalate, potentially altering global value chains, especially in the tech industry, where Trump has threatened tariffs on US tech giants like Apple.

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