Europe is ready to react if Donald Trump follows through on his threat to raise tariffs on European vehicles to 25%, Eurogroup President Kyriakos Pierrakakis said.
Delays to US-EU deal
The controversy intensifies already existing tensions over the US-EU trade deal, which has been significantly delayed. The two sides originally reached an agreement last July, but European lawmakers have yet to ratify it, calling for further changes.
The US president has argued that the EU has not fully honoured its commitments.
Speaking ahead of a meeting of eurozone finance ministers in Brussels, Pierrakakis rejected the claim, stressing that the bloc has “fulfilled all the conditions”.
Agreements on steel and aluminium tariffs
Even before Trump’s recent threat, the EU was expressing dissatisfaction with US tariffs on steel and aluminium products, despite revisions by the US administration. Almost half of the EU’s related exports are still subject to higher tariffs.
Although the two sides have agreed to continue negotiations, the Commission has already warned that it is ready to react if necessary.
Pressure from geopolitical developments
The new threat of tariffs is reigniting a sensitive trade dispute at a time when developments in the Middle East and rising energy prices are weighing on the global economy.
“This debate is unnecessary and unfortunate,” he said. “The last thing the global and European economies need is an additional level of uncertainty amid developments in the Strait of Hormuz and the Middle East.”
Support measures for the economy and society
Economic pressures have led governments across Europe to adopt support packages for households and businesses.
“The measures that work best are those that are targeted to those most in need,” Pierrakakis noted, adding that Europe has the appropriate analysis and tools to prevent the energy crisis from turning into a fiscal crisis.
