EU responds to Trump's tariff declaration
Trump's verbal jabs at the EU for allegedly exploiting America didn't stop at talk. The US President announced a 25% tariff on imported cars and various other goods from Europe, sending tremors through transatlantic trade relations. This move could significantly impact cooperation, prompting a firm response from the EU.
Brussels vowed a swift reaction to any unjustified barriers to free and fair trade. They threatened to retaliate if tariffs were used to challenge a legitimate and non-discriminatory policy. Meanwhile, Trump trumpeted the decision, labeling it a "25% generally speaking" levy on European cars and assorted goods. The EU, unamused, branded this view as baseless.
The EU, they argued, is the world's largest free market, benefiting the US massively. Fostering a united, large single market has driven down costs for US exporters and harmonized regulations across 27 countries. Consequently, American investments in Europe have yielded substantial returns. The US and EU boast a bilateral trade volume of $1.5 trillion, making their relationship the most lucrative globally.
However, the potential for disruption loomed large as news of the tariffs sent shivers down the spines of affected companies. Stock prices of auto giants like Porsche AG and BMW plummeted, with drops of 2.3% each in the Dax. Stellantis fell 3% within the EuroStoxx. According to Julian Hinz, Research Director for Trade Policy at the Kiel Institute for the World Economy, the new tariffs could reignite a transatlantic trade war with significant economic repercussions for both sides.
As global players, the EU and US need to tread carefully, considering the volatile impact of such unilateral measures on their citizens and industries.
The EU firmly believed that the proposed tariffs were unjustified, as they could potentially challenge a legitimate and non-discriminatory policy. Donald was ready to implement a 25% tariff on imported cars and other goods from Europe, which could significantly impact the Eurostoxx, as companies like Porsche AG and BMW saw their stock prices drop. Other affected industries might also face economic repercussions if this tariff dispute escalates into a transatlantic trade war.
