How Trump's Latest Tariff Threat Risks Deeper Damage to Europe's Economy
European Union officials, meeting in Brussels on Sunday, decided to hold off on imposing any countermeasures and continue negotiations in hopes of reaching an agreement before the newly announced measures take effect on Aug. 1.
'At the same time, we will continue to prepare further countermeasures so we are fully prepared,' Ursula von der Leyen, the president of the European Commission, told reporters in Brussels. 'We have always been clear that we prefer a negotiated solution.'
E.U. economists recently downgraded their growth forecast for the 20-member eurozone in 2025 to 0.9 percent, from 1.3 percent predicted in late 2024. The European Commission, the bloc's governing body, blamed 'the impact of increased tariffs and the heightened uncertainty caused by the recent abrupt changes in U.S. trade policy and the unpredictability of the tariffs' final configuration' for the lower expectations.
A 30 percent U.S. tariff on European goods 'would keep E.U. economic growth stuck around the zero line for longer,' said Bert Colijn, chief economist of the Netherlands at ING Bank. 'Quarters of negative G.D.P. growth cannot be ruled out,' he added.
High tariffs would hit several industries in Europe particularly hard, from wine and luxury goods to chemicals and pharmaceuticals, which Mr. Trump has threatened with 200 percent tariffs in the coming year. His announcement on Saturday also left in place a painful 25 percent tariff on European auto imports — in addition to the existing 2.5 percent rate — as well as a 50 percent tariff on aluminum and steel.
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