Europe struggles to respond to Trump as fears of a trade war run high

Some govts argue for a united front, others call for a pre-emptive engagement with him

- Jonathan Eyal

BRUSSELS - France has warned the United States that America has "everything to lose" should President Donald Trump unleash a trade war with the European Union.

Speaking hours after his first phone call with newly appointed US Secretary of State Marco Rubio on Jan. 28, French Foreign Minister Jean-Noel Barrot claimed that "thousands" of US companies based in Europe would be the "first victims" if Mr. Trump imposes tariffs.

Mr. Barrot acknowledged that Europe's trade deficit with the US remains a significant problem. "Americans buy more European products than the opposite," he said.

However, France's top diplomat also pointed out that "Americans invest more in Europe than Europeans invest in the US" and that Washington "has everything to lose from entering into a trade war with the European Union."

For now, Mr. Trump has not carried out the threats he made frequently during his electoral campaign to slap tariffs on trade with the EU.

Still, fears of a trans-Atlantic trade war run high in Europe.

And in a further sign of the exceptional nervousness about their continent's future relations with the US, European leaders have reiterated their "firm support" for Denmark, as the country faces Mr. Trump's demands to "buy" Greenland, the vast Danish-administered island near the Arctic.

According to EU trade data for 2023 - the last year full figures are available - the US ran a €156.6 billion (S$220 billion) deficit in goods with the EU.

While this was partially offset by an estimated €104 billion US surplus in services with Europe, the trade gap continues to draw President Trump's ire.

There is cautious optimism in European capitals after Mr. Trump did not unveil punitive tariffs during his first 10 days in office, even though the President has railed against the US trade deficit with Europe.