After Trump's Greenland tariff extortion, Macron is pushing the anti-coercion instrument, parliament has suspended ratification of July's surrender deal, and even Starmer is saying enough is enough.
A round-up of reactions from European leaders in response to Trump’s tariff threats.
IMO, the tariffs are not such a big deal. If we want to decouple from the USA, them tariffing us is a good way to start that process in a gentle and controlled manner. Us tariffing them is IMO a low priority. They barely export any physical goods to Europe that are competitive with domestic EU products. The thing that Americans sell us that we need to stop buying is software and cloud services, but those are not affected by tariffs.
Therefore it’s a waste of time and money for us to tariff the USA. What we need to do is make a targetted effort to get off of their software and cloud tech stack. This is already happening rather quickly, but the EU needs to do more to make it happen faster. The Anti-Coercion Instrument will help a lot if the EU triggers it, but there’s also a lot more subtle things the EU can do (some of which are already underway).
I agree that their goods do not hold a candle to European ones in many cases and services are the real issue, but there’s another side to the story, which is our products being in disadvantage in their market because of the tariffs, which directly results in job losses here, either through lost business or European companies moving production lines to the US. So the tariffs are a problem, and both the initial angry response from us and the sigh of relief after the deal was reached pretty much tell that story, and while tariffing back might not be the best counter, simply accepting the tariffs is not it either. A tax on Big Tech for example could’ve been a firm response, both to hurt American interests and catalyze our migration away from their services.
Nobody relevant is moving production lines from Europe to America, because it’d be insane to do so with how fast the tariff rates are constantly changing, and the fact that the US Supreme Court could end up ruling that Trump isn’t even allowed to set tariff rates. Even if the tariffs became stable though, european manufacturers won’t move their production lines to the USA because most advanced manufacturing relies on a complex, global supply chain. This means that tons of parts for e.g. cars need to cross borders multiple times, and often get double or triple tariffed, making it more attractive to move the production line out of the USA, and just sell the finished car in the USA and eat the tariff once.
Our products being less competitive there due to tariffs will result in lower sales, and will mean that our companies will focus on other markets, which is a good thing. If our companies rely on exports to the USA in order to be solvent, then that makes us more vulnerable to the USA. A 15% tariff is not enough to drive our exporters out, because they still easily outcompete in lots of categories, but it makes it less attractive for them to sell to the USA when they could sell elsewhere, which is on the whole, a good thing IMO.
A tax on Big Tech for example could’ve been a firm response, both to hurt American interests and catalyze our migration away from their services.
No disagreement here. The EU representatives likely chose to not do that one so they could buy more time to be more prepared for a louder phase or the trade war (or for Trump to get bogged down in another topic and forget about Europe). It’s looking unavoidable now, so I hope they go for a firmer approach that targets American big tech.
Okay, that is a fair and relevant example. I do think it’s worth noting though that Volvo is a bit of an outlier here. I also just don’t see how we decouple from the USA without having trade barriers.
I mean, maybe there’s things the EU or Sweden can or should do to force Volvo not to do that, but since they already let Volvo be bought up by China, I’m not sure it’d even be practical or possible.
IMO, the tariffs are not such a big deal. If we want to decouple from the USA, them tariffing us is a good way to start that process in a gentle and controlled manner. Us tariffing them is IMO a low priority. They barely export any physical goods to Europe that are competitive with domestic EU products. The thing that Americans sell us that we need to stop buying is software and cloud services, but those are not affected by tariffs.
Therefore it’s a waste of time and money for us to tariff the USA. What we need to do is make a targetted effort to get off of their software and cloud tech stack. This is already happening rather quickly, but the EU needs to do more to make it happen faster. The Anti-Coercion Instrument will help a lot if the EU triggers it, but there’s also a lot more subtle things the EU can do (some of which are already underway).
I agree that their goods do not hold a candle to European ones in many cases and services are the real issue, but there’s another side to the story, which is our products being in disadvantage in their market because of the tariffs, which directly results in job losses here, either through lost business or European companies moving production lines to the US. So the tariffs are a problem, and both the initial angry response from us and the sigh of relief after the deal was reached pretty much tell that story, and while tariffing back might not be the best counter, simply accepting the tariffs is not it either. A tax on Big Tech for example could’ve been a firm response, both to hurt American interests and catalyze our migration away from their services.
Nobody relevant is moving production lines from Europe to America, because it’d be insane to do so with how fast the tariff rates are constantly changing, and the fact that the US Supreme Court could end up ruling that Trump isn’t even allowed to set tariff rates. Even if the tariffs became stable though, european manufacturers won’t move their production lines to the USA because most advanced manufacturing relies on a complex, global supply chain. This means that tons of parts for e.g. cars need to cross borders multiple times, and often get double or triple tariffed, making it more attractive to move the production line out of the USA, and just sell the finished car in the USA and eat the tariff once.
Our products being less competitive there due to tariffs will result in lower sales, and will mean that our companies will focus on other markets, which is a good thing. If our companies rely on exports to the USA in order to be solvent, then that makes us more vulnerable to the USA. A 15% tariff is not enough to drive our exporters out, because they still easily outcompete in lots of categories, but it makes it less attractive for them to sell to the USA when they could sell elsewhere, which is on the whole, a good thing IMO.
No disagreement here. The EU representatives likely chose to not do that one so they could buy more time to be more prepared for a louder phase or the trade war (or for Trump to get bogged down in another topic and forget about Europe). It’s looking unavoidable now, so I hope they go for a firmer approach that targets American big tech.
It’s silly to say the EU is capitulating though.
It literally happened in my own city: Volvo announced firing of 2000 people in Sweden (article in Swedish) followed by announcement of moving a production line to South Carolina (article in Swedish). It hardly gets more real than that. But sure, call tariffs not important and my argument silly.
Okay, that is a fair and relevant example. I do think it’s worth noting though that Volvo is a bit of an outlier here. I also just don’t see how we decouple from the USA without having trade barriers.
I mean, maybe there’s things the EU or Sweden can or should do to force Volvo not to do that, but since they already let Volvo be bought up by China, I’m not sure it’d even be practical or possible.