Brussels has been left reeling after Donald Trump’s ‘America First’ imposition of 25% tariffs on all U.S. car imports.
Commission President Ursula von der Leyen released a statement before Trump had even finished his remarks on Wednesday, saying she “deeply” regretted the move and, in response, “will jointly protect our workers, businesses and consumers across our European Union.”
Brussels hopes to do this through “negotiated solutions” with Washington, but hints that more serious measures will be taken if Trump doesn’t back down—which he is unlikely to do.
Germany, which as Europe’s largest carmaker is likely to be hit hardest by the tariffs, insisted that the EU must “respond firmly.” After the German automakers federation warned of “a fatal signal for free trade,” Federal Minister for Economic Affairs and Climate Action Robert Habeck said on Thursday:
It must be clear that we will not give in to the U.S. We need to show strength and self-confidence.
French Finance Minister Eric Lombard also today decried this “very bad news,” telling France Inter radio that “the hostility is increasing.” He said
The only solution for the European Union will be to raise tariffs on American products in response.
Although the tariffs will not come into force until next week, shares in European carmakers and parts manufacturers already slipped on Thursday by as much as six points.
But Trump has warned that he will unleash further economic woe on the Continent if Brussels works with others—he named Canada in particular—to “do economic harm” to America in response to the tariffs. The president suggested that “large scale tariffs, far larger than currently planned,” are waiting in the wings.
Britain has taken a different approach to its Continental partners, with Chancellor Rachel Reeves saying “we’re not at the moment in a position where we want to do anything to escalate these trade wars.” That’s no surprise, given the UK’s recent toadying to Trump’s administration.
It is worth remembering that the tariffs cover all car imports to the U.S., not just those sent from Europe, and so have also been described as “extremely regrettable” by Japanese officials and as a “direct attack” by Canada’s prime minister. Brazil’s President Luiz Inacio Lula da Silva likewise told reporters on Thursday that “we cannot stand still believing that only they are right and that only they can tax other products.”
We are going to take the approach that we think will be good for Brazil.
The growing tension should be watched closely.
