Trading with Trump EU will need carrot and stick to take on tariffs
The Guardian|January 17, 2025
If there is one thing the EU knows about Donald Trump, it is that he loves tariffs.
Jennifer Rankin
Trading with Trump EU will need carrot and stick to take on tariffs

If there is one thing the EU knows about Donald Trump, it is that he loves tariffs. The incoming president has said "tariff" is "the most beautiful word in the dictionary" and has threatened to impose them on US allies around the world.

On the campaign trail he proposed tariffs of 10-20% on imports from all countries, with a 60% rate reserved for China. Once elected, Trump tweeted that the EU must buy more US oil and gas "otherwise it is TARIFFS all the way!!!" This week he said he would create an "external revenue service" on the day of his inauguration.

The European Commission, which leads on trade policy for the EU's 27 member states, has been preparing for the next US president since last summer. Details of its response to potential tariffs remain closely guarded and dependent on what Trump actually does.

It is understood that the commission has a twofold, carrot and stick approach, including the EU's own retaliatory tariffs and offers to buy more US goods. Before Trump's social media outburst, the commission's president, Ursula von der Leyen, proposed that the EU could buy more liquefied natural gas from the US to replace what it buys from Russia.

However well prepared the EU is, officials are concerned about a possible trade war. The EU and US traded a record €1.54tn (£1.3tn) in goods and services in 2023. Commission officials describe that trade as "balanced", pointing out that the EU buys more services from the US than it sells in return.

This story is from the January 17, 2025 edition of The Guardian.

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This story is from the January 17, 2025 edition of The Guardian.

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