Trump's trade aggression could trigger another eurozone crisis

It won't be in America's interest but Europe's best response would be to focus on its competitiveness

- DESMOND LACHMAN

At the first cabinet meeting of his second term in office, US President Donald Trump declared his intention to impose a sweeping 25% tariff on all imports from the European Union. But before opening a European front in his trade war, Trump might want to consider the continent's economic malaise: the German economy has been experiencing a prolonged downturn, while Italy and France are struggling with serious public-debt problems. Maybe then Trump will grasp that his tariff actions, which constitute a significant part of his 'America First' agenda, risk triggering a Europe-wide recession and another eurozone debt crisis.

Some might argue that Trump has no interest in the fate of Europe or any country on the other side of the Atlantic from the United States. But given how badly the 2010 Greek debt implosion shook American and world financial markets, similar crises in France and Italy—which are not just the European Union's second- and third-largest economies but also many times the size of Greece's—would have truly catastrophic consequences for markets and the global economy. That is the last thing that President Trump needs on his watch.