The world’s largest free trade bloc, European Union (EU) hits back after President Trump said his administration would soon announce a 25% tariff on imports from the EU.
A bloc with 27 member countries includes Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
Three of the EU members—France, Germany and Italy—are also a part of G7 (a group of seven formed to engage in international economic development and security issues and includes US, Canada, U.K., and Japan)
The bloc is America’s third largest trading partner alongside China. Trump has said he will impose 25% tariffs on its two largest trading partners, Canada and Mexico, next week.
In 2024, goods imported to the U.S. from the EU’s 27 member countries totaled $605.8 billion, according to the data from Office of the U.S. Trade Representative.
During a cabinet meeting on Wednesday, Trump announced tariffs, claiming that the EU was established to “screw” the US.
He accused the EU of exploiting the US, stating, “They don’t accept our cars. They don’t accept, essentially, our farm products. They use all sorts of reasons why not. And we accept everything of them, and we have about a $300 billion deficit with the European Union."
According to the data retrieved from U.S. Census Bureau, trade deficit with EU stands at $235.57 billion.
If implemented, Trump’s tariffs on imports from EU would mean American companies purchasing the imported goods at a price. To offset these expenses, businesses tend to pass on at least some of the cost to consumers, either through immediate price increases or gradual adjustments over time.
Either way, it means adding fuel to the current inflation.
A European Commission spokesperson said, “The EU will react firmly and immediately against unjustified barriers to free and fair trade, including when tariffs are used to challenge legal and non-discriminatory policies. The EU will always protect European businesses, workers and consumers from unjustified tariffs.”