Trump could send EU hurtling toward tariff war with both US and China, Macron warns
Emmanuel Macron warned that Europe risks getting divided by Donald Trump’s economic policy and being thrown into a simultaneous trade war with Washington and Beijing.
The next US administration “will continue to protect the market very strongly, at the risk of dismantling value chains between Europeans and Americans”, the French president said on Wednesday while speaking on a panel about European competitiveness.
“We’re clearly entering a world of tariff wars.”
Trump has floated the idea of imposing a 10 per cent to 20 per cent tariff on all goods coming from abroad, which could impact Europe’s export-reliant industries and countries, such as cars and chemicals.
The transatlantic list of grievances includes green subsidies offered by the Biden administration, steel and aluminium levies and a long-running dispute between Boeing and Airbus.
This would come on top of trade tensions between Europe and China exacerbated by an anti-subsidy probe the European Union launched with urging from France into Chinese-made electric vehicles. China has responded with tariffs on European brandies, which particularly affects French cognac.
German Chancellor Olaf Scholz also warned on Wednesday that overcapacity and countries selling goods at below-market prices are a continuing threat for Europe.
“The United States has been bringing industrial production back into its own country with major subsidy programmes,” Scholz said at a lobbying event for the steel industry in Berlin. “At the same time, they are sealing off the domestic market with high import tariffs.”
Speaking alongside the former head of the European Central Bank Mario Draghi, Macron said: “One of the points that Mario raised, which is very important for me, is also to know how we’re going to be caught up in the trade war with China, because one of the things that could happen is that it could be tariffs for everyone.”
He then added that Washington could “force the Europeans to separate themselves from the Chinese more quickly” by putting “very strong tariffs on China” but telling Europeans “if you’re more complacent, we’ll put the tariffs on you”.
Already, the EU’s EV tariffs have split European countries, with Germany and its carmakers strongly critical of the move.
“And that’s when there’ll be a risk of division among Europeans, depending on the sectoral interests and of different countries, some of which are very exposed to the Chinese market,” Macron added, “while others who are more dependent on the American market will give in more quickly to the pressure that the American federal government may put on them.” – Source: SCMP –