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  • 2 min

And how should Europe react?

  • 4 April 2025
  • Philippe Waechter
  • Tariffs
  • Trumponomics
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A bilateral trade deficit in the United States necessarily reflects manipulation and taxes by the other country. It must therefore be corrected. This is the spirit of the measures announced by Donald Trump on customs tariffs.
Thus, the tariff applied to each country corresponds to the trade balance divided by US imports from This country. If the rate is positive, it is divided by two and corresponds to the rate announced by Donald Trump, with a minimum of 10%.
In other words, any bilateral deficit of the United States testifies to a plundering of the American economy, the tariff must correct this imbalance thus conditioning its behavior to American wishes.
This vision does not correspond to historical reality but to the American desire to impose its leadership and its capacity to be the ultimate decision-maker.

With this in mind, what might Europe’s reaction to these new tariffs be?
1- Europe can negotiate a lower rate to be less penalized. This is a possible option for Ursula Van der Leyen. The balance of power that would be established would be in favor of the Americans, who would then be in a comfortable position to negotiate and accept or reject the proposals. This is a choice in which the USA imposes its ideas since the negotiation would focus on Europe’s acceptance of American grievances.

2- Europe can take retaliatory measures to avoid being subjected to excessively high customs tariffs and use the balance of power in its favor. However, this would risk raising customs tariffs, as suggested by Scott Bessent, the US Treasury Secretary. The shock would then be even more severe for business and employment.

3- A form of contempt where Europe, in the face of excessive customs tariffs, would go and negotiate alliances with other countries (India, China and others). American tariffs are accepted, but history is written elsewhere than in American dependence.

The first two reactions are consistent with the White House’s choices. For a country, entering into negotiations within this specific framework means making its choices conditional on those of Donald Trump.
Implementing retaliatory measures is a possible option for China, whose vision is long-term and whose economy is very powerful. Isn’t Europe too scattered to take this path? Such a showdown would require a similar approach from all countries in the Union.

Ultimately, the most sympathetic option appears to be one in which Europe ignores American wishes. This cannot be an easy path given Europe’s dependence on US technology and NATO, which is still in place. But it could be a way for Europe to gain its independence and increase its autonomy. It is not the knee-jerk, playground option, but it is probably the one that will allow us to sign the European renewal that we are all waiting for.

Related Topics
  • Tariffs
  • Trumponomics
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