What Trump's tariffs mean for the EU
07 April 2025
Last week, the Trump administration upended the financial and economic world order by announcing sweeping new tariffs. The US will now apply a 10% baseline tax on all imported goods. About 60 countries, including the EU, have been slapped with an additional minimum 20% 'reciprocal' tariff, based on what the US claims are unfair trade practices (although that calculation is heavily disputed).
What does this mean for the EU's economy? Europe exports a lot to the US, especially in sectors like automotive, aerospace, and machinery. German carmakers alone send around 20% of their output across the Atlantic. With a 20% tariff, that business suddenly gets a lot more expensive, and a lot less competitive.
Analysts predict the EU could face tens of billions of euros in losses, especially if export demand shrinks. This would lead to lower revenues, production cuts, and layoffs, particularly in export-driven industries.
Consumer goods, medication, and manufacturing supplies are expected to become more expensive – think Levi's, Harley Davidson, or Jack Daniel's. European businesses also face uncertainty over access to the US market, while a flood of cheap Chinese goods could further strain local industries.
 | Henrique Tizzot Sounds pretty bad. What's the EU's plan? We don't know for sure yet. But European Commission president Ursula von der Leyen didn't mince words in her response. Calling Trump's move a "slap in the face," she said the bloc is ready to retaliate. The EU is finalising a €26 billion countermeasure package in response to earlier US tariffs on steel and aluminum and preparing new measures to protect industries now at risk – those are expected to be announced in mid-April. |
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