At the close of 2018, the European Union watched with astonishment as the United States, its long‑time ally, imposed 25 percent tariffs on steel and 10 percent on aluminum imports from Europe, framing the move as a national security measure and a breach of free‑market norms. Brussels answered with restrained retaliation to ease tensions, but Washington read it as weakness and kept pressing. The resulting truce held until March 21, 2025, synchronizing with the inauguration of the next U.S. administration. [Source: European Commission data]
Six years on, the EU has not forgotten the lesson and is ready. The European Commission, steered by Ursula von der Leyen, has created a dedicated task force to prepare for either party winning the White House, while quietly mapping a Trump‑style tariff confrontation should the 27 face a renewal of such pressure. A senior European diplomat told Politico that Europe has changed significantly and will be ready to respond swiftly and decisively, signaling it will not be taken lightly. [Source: Politico, European Commission statements]
During Biden’s term, most of Trump’s tariffs remained in effect, including measures affecting Spain’s black olives, though some restrictions on European products were temporarily suspended. The horizon remains unsettled, with speculation that a Trump‑style protectionist wave could reemerge. After implementing the largest tariff increase seen in many decades, talk persists of tariffs between 10 and 20 percent on all imports starting in 2025. The goal cited is to strengthen the dollar, defend American firms, create jobs at home, and shrink the deficit. [Source: U.S. policy reports, economic analyses]
Hit to the EU economy
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Pulling back from a hard line would threaten growth across Europe. Implementing new tariffs could sharply reduce exports and injure key manufacturing sectors such as machinery, chemicals, and vehicles. If tariffs were set at 10 percent, Goldman Sachs projects the eurozone’s wealth could slip by about 1 percent, while the euro could weaken by roughly 3 percent, according to market analysts. A senior European policymaker noted that the bloc does not gain from tariffs and remains more exposed to global markets. [Source: Goldman Sachs, European policy briefs]
The trade relationship between the United States and the European Union moves about one trillion dollars in goods and services each year and sustains roughly 9.4 million jobs on both sides of the Atlantic, according to European Commission data. The region runs a substantial surplus with the United States, a dynamic that has long drawn criticism from Washington. [Source: European Commission data]
Brussels prepares
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The EU’s contingency plan centers on facing a potential Trump‑style tactic with a reciprocal stance, potentially applying a 10 percent tariff in response. European policymakers anticipate that tougher tariffs from Washington could be met with a matching approach to push negotiations forward. A senior diplomat said Europe is ready to raise the tempo if needed. Adrián Vázquez, a member of the European Parliament from the PP party, argued that Europe is the world’s largest single market and holding the red button in such a standoff provides substantial leverage. [Source: European Parliament statements, academic analyses]
Both eurodeputies, part of the Delegation for Relations with the United States, emphasize that the transatlantic relationship remains vital. They say cooperation will continue under either administration, but Europe has learned from past episodes. [Source: European Parliament discussions]
The automotive sector in the crosshairs
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Germany, the engine of the EU economy and home to major automakers, finds itself in the crosshairs. Washington has signaled a desire for German carmakers to pivot toward American production. In the first term, manufacturers such as Volkswagen, BMW, and Mercedes‑Benz expanded investments in the United States, a strategy analysts say could falter this time if tariffs rise. The proposed tariffs could shave hundreds of billions of euros from Germany’s GDP, according to the German Economic Institute, while the German auto sector’s deep integration with the rest of the bloc means any setback would pull the whole 27 into decline. [Source: German Economic Institute, industry analyses]
Moreover, Washington has pledged to challenge European regulators over antitrust fines levied against major U.S. tech giants for abusing market power. [Source: regulatory bodies, industry reports]
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Trade war with China?
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Both Trump and Harris favor tariffs against China. Yet the Republican approach envisions tariffs as high as 60 percent, a drastic move that could draw the EU into a broader trade and technology clash with Beijing. If the United States blocks Chinese goods with steep tariffs, those products could be redirected to the European market, prompting Europe to consider new tariffs and heightening tensions with Beijing. While Brussels has tried to reduce dependence on China, it remains the bloc’s largest supplier of imports, accounting for about 20.5 percent in 2023. The European Council on Foreign Relations notes that a robust Europe is essential to containing China’s rise. [Source: European Council on Foreign Relations, trade data]