Investors brace for a potential escalation in Trump’s trade wars. Markets were already on edge ahead of the March 4 deadline for US tariffs on Canada and Mexico and the upcoming March 12 implementation of steel and aluminum duties.
Trump aims to shrink the US’s $208bn trade deficit with the EU by imposing tariffs, making European imports more expensive. This deficit is the second largest after China’s $279bn.
If the tariffs take effect, some EU countries will feel the impact more than others. Germany, the bloc’s largest exporter to the US, shipped €158bn (£131bn) worth of goods in 2023. Meanwhile, the Netherlands is the biggest importer of US goods, with €76bn in purchases last year.
European Automakers Hit as Trump Threatens 25% Tariffs
Shares in European carmakers are tumbling this morning after Donald Trump threatened to impose 25% tariffs on EU vehicle imports.
The former US president signaled that new tariffs on cars and other goods would be announced “very soon,” rattling European stock markets.
Germany’s DAX index has fallen 1.2%, with automakers leading the declines:
- BMW down 2.9%
- Porsche down 2.8%
- Volkswagen down 2.75%
- Mercedes-Benz down 2.5%
Elsewhere in Europe, car giant Stellantis has slipped 2.75%, while Renault is down 1.2%.
Polish Prime Minister Donald Tusk has hit back at Donald Trump’s assertion that the EU was created “to screw the United States.”
In a social media post in English, Tusk said: The EU wasn’t formed to screw anyone. Quite the opposite. It was formed to maintain peace, to build respect among our nations, to create free and fair trade, and to strengthen our transatlantic friendship. As simple as that.
A European Commission spokesperson stated: “The EU will respond swiftly and decisively to any unjustified trade barriers, including tariffs that challenge legal and non-discriminatory policies. We remain committed to protecting European businesses, workers, and consumers from unwarranted tariffs.”
Bloomberg reports that Trump’s proposed tariffs could target up to $29.3bn (€28bn) worth of EU exports.
The European Union has vowed to respond swiftly if the US imposes tariffs on its member states’ goods. “The EU sees no justification for these tariffs. We will take action to protect European businesses, workers, and consumers from unjustified measures,” the bloc’s executive body stated earlier this month.
