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US President Donald Trump has suggested that the European Union (EU) could be the next target of US tariffs, following the imposition of 25% levies on imports from Mexico, Canada, and China. Speaking to the BBC, Trump hinted that tariffs on EU goods could come “pretty soon,” citing trade imbalances between the US and the EU. He argued that the US exports far more to the EU than it imports, particularly in sectors like cars and farm products, and expressed frustration over the EU's lack of reciprocal trade.
Trump also addressed his relationship with British Prime Minister Sir Keir Starmer, noting that although the UK has been "out of line" on trade, he believes any issues can be worked out. He described his interactions with Starmer as positive, mentioning multiple meetings and phone calls, and said they were getting along well.
In response to Trump’s remarks, the EU has made it clear that it will retaliate if it faces tariffs, echoing the strong responses already seen from Canada, Mexico, and China. Mexico and Canada have promised to take countermeasures, while China has warned of “corresponding countermeasures.”
The president's threat of tariffs stems from his ongoing dissatisfaction with the US’s trade deficit with the EU, which occurs when the US imports more from the EU than it exports. In particular, Trump has long criticized the EU’s car exports to the US, which he believes are unfairly large compared to US car exports to Europe.
The threat of new tariffs has sent shockwaves through the global economy, with the FTSE 100 index of the UK’s largest publicly listed companies dropping by over 1% following Trump’s comments. European car manufacturers, such as Volkswagen, BMW, and Porsche, also saw their stocks slump due to concerns that tariffs could harm their US sales. Some analysts have estimated that companies like Volkswagen and Stellantis could see billions of euros in revenue impacted by potential tariffs.
Despite the concerns, Trump views tariffs as a tool for protecting domestic industries, boosting the US economy, and generating tax revenue. As the situation develops, world leaders are keeping a close eye on how the US will proceed with its trade policy and how other nations will respond to protect their markets.
*Source: BBC
