Trump threatens to reignite trade war with EU, says he’s not seeking a deal
U.S. President Donald Trump threatened on Friday to ratchet up his trade war again, pushing for a 50% tariff on European Union goods starting June 1, roiling global markets after weeks of de-escalation.
Major U.S. stock indexes and European shares fell, and the dollar weakened, while the price of gold, a safe-haven for investors, rose. U.S. Treasury yields fell on fears about tariffs’ effect on economic growth.
Trump’s broadside against the EU was prompted by the White House’s belief that negotiations with the bloc are not progressing fast enough.
He reiterated his complaint that the European Union treated the U.S. badly and restricted the U.S. from selling cars into the EU. “And I just said, ‘It’s time that we play the game the way I know how to play the game.'”
“I’m not looking for a deal,” Trump said when asked whether he expected a deal before June 1. “We’ve set the deal – it’s at 50%. But again, there’s no tariff if they build their plant here.”
EU trade Chief Maros Sefcovic said the European Commission, the EU’s executive arm, was fully committed to securing a deal that worked for both sides, following a Friday phone call with U.S. counterpart Jamieson Greer and U.S. Commerce Secretary Howard Lutnick. He added that EU-U.S. trade “must be guided by mutual respect, not threats.”
Speaking to reporters in The Hague, Dutch Prime Minister Dick Schoof backed the EU’s strategy in trade talks and said the EU was likely to see this latest announcement as part of the negotiations.
“We have seen before that tariffs can go up and down in talks with the U.S.,” he said.
The White House paused most of the punishing tariffs Trump announced in early April against nearly every country in the world after investors furiously sold off U.S. assets, including government bonds and the U.S. dollar. Trump left in place a 10% baseline tax on most imports, and later reduced his massive 145% tax on Chinese goods to 30%.
As for now, a 50% levy on EU imports could raise consumer prices on everything from German cars to Italian olive oil.
The EU’s total exports to the United States last year totaled about 500 billion euros ($566 billion), led by Germany (161 billion euros), Ireland (72 billion euros), and Italy (65 billion euros). Pharmaceuticals, cars and auto parts, chemicals, and aircraft were among the largest exports, according to EU data.
Mary Lovely, a senior fellow at the Peterson Institute for International Economics, said the 50% tariffs on Europe are most likely a “negotiating ploy” by Trump, as he has previously retreated on tariffs after taking a hard line.
She added that Trump seems to believe that negotiations operate by going to a “threat point” that could risk self-harm to the U.S. just to demonstrate how serious he is, in hopes that doing so would produce an agreement.
