Trump leaning towards 15% tariffs? Europe prepares 93 billion in countermeasures

Agreement between Washington and Brussels hangs in the balance: tariffs on European goods remain a real threat. EU ready to respond from 7 August

Will tariffs on European goods imported into the United States ultimately be set at 15%? At the moment, no one can say for sure, except Donald Trump. The agreement reached between Brussels and Washington needs the US president’s signature to become effective.

Reasons for a possible no
Why might Trump decide to reject the agreement? Beyond the merits, which would already seem to favour US interests, there remains the possibility of a deliberate confrontation: allowing the tariffs to take effect on 1 August and then accepting European retaliation. This approach would turn the negotiations into an open trade war.

European concessions: a necessary choice
On the other hand, Europe has chosen to give in. After realising that reciprocity had become unrealistic, the goal was to limit the damage. So it accepted a formula that provides for 15% tariffs on European goods sold in the US, compared to minimal or zero tariffs (around 5%) for American products in Europe.

An advantage amplified by the exchange rate
The disparity is even more marked than the numerical difference between the rates suggests: the effect of the exchange rate further strengthens the American position. This makes the situation even more unbalanced and unsustainable for many European companies.

US demands: cars, drugs and chips in the crosshairs
That’s not all. Trump is pushing to further increase tariffs in three key sectors: cars, pharmaceuticals and semiconductors. This is a proposal that Europe strongly rejects, under pressure mainly from Germany, France and Italy, the latter being heavily exposed on the pharmaceutical front.

The EU’s counter-move: 93 billion in counter-tariffs
While waiting for the American decision, Brussels is not standing still. The European Union is ready to launch a €93 billion response, with countermeasures that would take effect on 7 August in the event of no agreement.

The costs of the trade war
The only certainty, for now, is that the final cost of the trade war – whatever form it takes – will fall on businesses and consumers on both sides of the Atlantic.

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(Source and photo: © AndKronos)