EU warns to prepare for early Trump tariff action – POLITICO

Finally, the US trade deficit with the EU has increased sharply since Trump’s first term. It is currently on track to set a new record of around $230 billion in 2024. Trump’s agreement He teamed up with then-European Commission President Jean-Claude Juncker to fend off an earlier threat of tariffs on European cars.

Most economists argue that the large goods trade deficit in the United States is the result of macroeconomic factors such as national spending and savings rates, with trade barriers playing less of a role.

But Trump appears to believe that trade imbalances are caused by foreign trade practices such as tariffs and product standards; These practices unfairly inhibit U.S. exports while the United States naively maintains one of the world’s most open markets.

Don’t think this is a bluff: To solve this problem, Trump is threatening to impose cross-border tariffs of up to 20 percent on all $3 trillion worth of U.S. imports; That adds up to about $575 billion worth of cars, pharmaceuticals, machinery and a long list of other products coming from the EU. .

This would violate U.S. tariff commitments at the WTO, but Trump may try to justify it on national security grounds.

Everett Eissenstat, who was the president’s assistant for international economic affairs in the early years of the first Trump administration, said European leaders should not assume that Trump’s tariff threats “are just a bluff or that it’s not going to happen.” “The president has been very consistent in doing what he said he was going to do, and that’s what the team he put in place was built to do that.”