EU “stands ready” for trade war with US

President Donald Trump © Gage Skidmore
President Donald Trump © Gage Skidmore

The EU has warned that it is ready to enter a trade war with the United States in response to comments by US President Donald Trump.

In an interview with UK broadcaster ITV on Sunday (28 January), Trump accused the EU of imposing unfair tariffs when importing American goods: “We cannot get our product in. It’s very, very tough. And yet, they send their product to us, [paying] no taxes.”

He called the current agreement “very unfair” to the US, and warned that the EU’s stance on transatlantic trade “will turn out to be very much to their detriment”. However, the EU has now responded, and promised it will retaliate if the US makes moves to restrict trade.

A spokesperson said: “For us, trade policy is not a zero sum game. It is not about winners and losers. We here in the European Union believe that trade can and should be win-win. The European Union stands ready to react swiftly and appropriately in case our exports are affected by any restrictive trade measures by the United States.”

The spokesperson did not offer any further details of what actions the EU might consider in response to new measures by the US.

How likely is a US-EU trade war?

The potential of a trade war erupting between Europe and the US has increased in recent years, in part thanks to an increasing pursuit of protectionist policies by the American administration. Cecilia Malmström, the European Commissioner for Trade, issued a warning last year against the idea of an EU-US trade war.

The US government recently announced that it is investigating a plan to impose import tariffs on steel and aluminium, in the interests of national security. In response, the European Commission wrote that a “sweeping measure targeting many steel products and all countries for national security reasons is not justified”, in a formal submission to the investigation.

Additionally, the government imposed tariffs of 20% on imports of washing machines and 30% on imports of solar cells and modules last week. The move was condemned by China and South Korea, the latter of which announced its intention to complain to the World Trade Organization about the move.

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