Fears of a US-EU trade war have resurged after Europe refused to back down in the face of fresh threats from Donald Trump.
The word tariff has dominated much of US President Trump’s second term, with him frequently threatening to act against countries.
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This included the so-called “liberation day” last month, where he imposed tariffs on many of his trade partners.
On Friday, after a period of relative calm which has included striking a deal with the UK, he threatened impose a 50% tariff on the EU after claiming trade talks with Brussels were “going nowhere”.
US President Trump has repeatedly taken issue with the EU, even claiming it was established to exploit the US.
However, in response to the latest aggressive rhetoric on Mr. Trump’s social media account, the European Commission – which oversees trade for the 27-country bloc – remains unyielding.
EU trade chief Maros Sefcovic commented: “EU-US trade is unmatched and must be guided by mutual respect, not threats.”
“We are prepared to defend our interests.”
Donald Trump speaks to reporters in the Oval Office on Friday
Other EU leaders and ministers remain firm in their stance following Mr. Trump’s comments.
Polish Deputy Economy Minister Michal Baranowski suggested the tariffs are a negotiating ploy, with Dutch Deputy Prime Minister Dick Schoof noting that “tariffs can go up and down.”
French Trade Minister Laurent Saint-Martin stated that the latest threats would not facilitate trade talks.
He emphasized that “de-escalation” is a primary aim for the EU, but warned, “We are ready to respond.”
Mr. Sefcovic consulted with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick following Mr. Trump’s comments.
US President Trump previously stepped down from a tit-for-tat trade war with China, where tariffs rose above 100%.
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US and China End Trade War
Sticking points
Talks between the US and EU have been gridlocked.
In the past week, Washington sent a list of demands to Brussels – including adopting US food safety standards and removing national digital services taxes, according to sources familiar with the talks.
In response, the EU reportedly proposed a mutually beneficial deal that could include the bloc potentially purchasing more liquefied natural gas and soybeans from the US, along with cooperation on issues such as steel overcapacity, which both sides attribute to China.
Stocks tumble as Trump grumbles
Major stock indices plummeted following Mr. Trump’s comments, which coincided with his threat to impose a 25% tariff on US tech giant Apple.
The president is adamant that Apple’s iPhones should be manufactured in the US.
The majority of Apple’s phones are currently produced in China, with some manufacturing also in India.
Apple’s shares dropped by 3% and the dollar fell 1% against the Japanese yen, while the euro appreciated 0.8% against the dollar.
