Europe, you are the next.
That is the last message from President Trump, who has repeatedly said in recent days that he would draw punitive rates at the 27 members of the European Union.
Rates “will certainly happen with the European Union,” Mr. Trump told the BBC on Sunday evening and they come “fairly quickly”. He doubled the threat on Monday and complained about shortages in car and farm products, hours before new rates were expected, come into effect on the import from Canada and China, with Mexico being delayed from one month.
“The European Union has abused the United States for years and they cannot do that,” Mr Trump said on Monday.
A main spinning Blitz of executive orders and policy turnouts with regard to international trade, help and agreements has come from the White House in the last two weeks. But a common thread is that Mr Trump has directed the toughest punishments on some of the nearest economic and military allies of America.
One reason is that in addition to China, the United States has large trade shortages with Mexico, Canada and the European Union, said Agathe Demarais, a senior policy fellow at the European Council on foreign relations.
“Trump is obsessed with trade shortages,” she said. And he can “start with the places where he thinks he will achieve fast victories.”
Of course, trade surpluses are not necessarily any indication of the economic health of a country. The last time the United States had a general trade surplus was 1975, when the American economy was still in a serious recession.
In 2023, the United States had a trade surplus with Great Britain, according to the American Bureau of Economic Analysis. And that can help great -Britain to avoid rates. “I think one can be worked out,” said Mr. Trump, unlike Great Britain with Europe.
As far as the European Union is concerned, Mr. Trump has characterized the trade practices of the block as a 'atrocity'. But rates imposed by the United States and the European Union together are quite similar.
“The pattern of protectionism between the US and Europe is very right, and there is absolutely no evidence that the US has been made of his use,” said Kimberly Clausing, an economist at the Peterson Institute for International Economics in Washington. “This claim is unfair.”
Products that are exported from the United States to the European Union are on average subject to a rate of 3.95 percent, according to Global Markets research. A rate of 3.5 percent is added on average to products from the European Union that go to the West about the Atlantic Ocean.
However, the differences are larger on some items, such as cars. The rate of the European Union is 10 percent, compared to 2.5 percent from the United States. And EU rates for food and beverages are on average 3.5 percent higher than those of the United States. Mr. Trump has long complained about both sectors.
The United States are the number 1 buyer of the EU export, according to Eurostat accounting for almost 20 percent of the total in 2023. The surplus of the block on goods was around $ 160 billion; There was a shortage of $ 107 billion about services.
Mette Frederiksen, the Prime Minister of Denmark, said on Monday that she would “never support allies”, but that “if the US will place heavy rates in Europe, we need a collective and robust response.”
Donald Tusk, the Prime Minister of Poland, said: “We have to do everything we can to avoid – totally unnecessary and stupid rate or trade wars.”
For a month, European leaders have quietly prepared themselves how to respond. Managers and trade associations warn that the brewing war and the unpredictable way in which it is being conducted can delay the investments. American rates on European goods would also harm companies if they were weakened by marking the demand at home and in China.
The American Chamber of Commerce on the European Union issued a statement on Monday in which he criticized potential rates, with the argument that they would invite retribution and make companies suffer on both sides of the Atlantic.
German managers were reluctant on Monday to comment on the possibility of rates about Europe, but they responded with a mixture of concern and dismissal to those who focus on Mexico and Canada.
“German industry is directly affected by the rates, because it also supplies the American market of factories in Mexico and Canada,” said Wolfgang Niedermark, board member of BDI, a German industrial lobby group. “The car industry and its suppliers, including the chemical industry as a supplier of chemical raw materials, will be hit much harder than other sectors.”
Many of the 2,100 German companies that have activities in Mexico, including BMW, Volkswagen and Audi, chose to build there after Mr Trump signed a trade agreement with Mexico and Canada during his first term, when threat of rates against Germany appeared.
Almost a quarter of the 1.3 million vehicles that German car manufacturers sold in the United States last year were produced in Mexico. In addition to car companies, a web of suppliers of car parts, such as Bosch and ZF, research and production installations there.
Asian and European stock markets fell on Monday, with some of the largest decrease in stock prices at car manufacturers.
Economists of the Prognos Institute in Switzerland calculated that 1.2 million jobs in Germany were dependent on exports to the United States, and that no fewer than 300,000 of them could be threatened if the rates against Europe were in force.
The luxury industry in Europe has also made itself for a hit. In 2019, the United States briefly raised 25 percent rates on French wines and Italian cheeses, as well as luxury leather handbags and luggage from brands such as Louis Vuitton and Gucci.
Bernard Arnault, the head of the LVMH Moët Hennessy Louis Vuitton Empire, tried to cultivate direct ties with Mr. Trump, who personally invited him to attend last month's inauguration in Washington. During a profit presentation last week, Mr Arnault said that by lowering corporation tax to 15 percent and “welcoming you with open weapons,” Mr Trump made the United States more attractive for companies.
There may be reasons for a country to worry about too large a trade deficit, said Mrs. Clausing, the economist of Peterson Institute. But the United States is not currently confronted with those problems.
The trade deficit indicates that American consumers get many things from the rest of the world, she explained. If the rates increase prices and pay Americans more, as most economists expect, their standard of living will fall.
Liz Alderman contributed report from Paris, Melissa Eddy van Berlin and Jeanna Smialek from Brussels.
