{"id":255651,"date":"2025-05-25T00:41:56","date_gmt":"2025-05-25T00:41:56","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/donald-trump-makes-risky-bet-by-rekindling-his-trade-war-with-the-eu\/"},"modified":"2025-05-25T00:41:56","modified_gmt":"2025-05-25T00:41:56","slug":"donald-trump-makes-risky-bet-by-rekindling-his-trade-war-with-the-eu","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=255651","title":{"rendered":"Donald Trump makes risky bet by rekindling his trade war with the EU"},"content":{"rendered":"


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Donald Trump loves to make deals. And he may be calculating that his sudden escalation of tariffs on the EU will squeeze Brussels into making big concessions as he opens a new front in his global trade war. <\/p>\n

But it is a risky bet. Although trade talks between the US and the EU had been moving slowly, Trump\u2019s threat to put 50 per cent tariffs<\/a> on all imports from the bloc from June 1 has raised the economic and diplomatic stakes dramatically.<\/p>\n

The move threatens to jeopardise a recent recovery in global equity prices triggered by Trump\u2019s tilt towards dealmaking and de-escalation with other trading partners, including the UK<\/a> and China<\/a>. It could also further damage strained transatlantic relations.<\/p>\n

The gamble reflects the frustration of the president and his top officials with what they view as the EU\u2019s obstruction in the negotiations \u2014 and a belief that Brussels will concede first or suffer more than the US if there is no deal.<\/p>\n

\u201cIt\u2019s a classic Trump bullying tactic, it\u2019s what he does. If he doesn\u2019t get what he wants, he pushes back and makes more threats, and then he waits to see what happens,\u201d said Bill Reinsch, a trade policy expert at the Center for Strategic and International Studies in Washington. <\/p>\n

\u201cIt\u2019s intended to get the Europeans to back down \u2014 my reading of them is that they won\u2019t,\u201d he added. <\/p>\n

In the Oval Office on Friday afternoon, Trump<\/a> insisted he wasn\u2019t looking for a quick agreement with Brussels, and vowed that the 50 per cent tariffs would take effect on June 1 as planned. \u201cThat\u2019s the way it is,\u201d he said. <\/p>\n

US Treasury secretary Scott Bessent told Fox News that the purpose of the planned tariffs was to \u201clight a fire under the EU\u201d \u2014 suggesting that there was some leeway for negotiations before or after the June 1 deadline. <\/p>\n

But the brinkmanship creates uncertainty, warn economists. \u201cThe proposed tariffs on the EU highlight a key forecast risk, whereby tariffs remain an ongoing tool to be wielded by the Trump administration whenever negotiations hit a snag. Repeated tariff threats and rollbacks will keep policy uncertainty elevated,\u201d consultancy Oxford Economics wrote in a note on Friday.<\/p>\n

Washington\u2019s precise demands on Brussels are unclear. In his social media post on Friday, Trump rattled off his dissatisfaction with many aspects of EU tax, regulatory and trade policy that would be hard to address quickly. <\/p>\n

Trade experts in Washington say the administration is frustrated that the EU\u2019s offers are no different from those it has made to the US in the past. <\/p>\n

\u201cNormal methods of diplomacy and traditional approaches to trade negotiations have not resulted in a US-EU trade agreement by any administration. So I\u2019m not surprised to see the president take a very different tack with the EU,\u201d said Kelly Ann Shaw, a former White House official during Trump\u2019s first term, and a partner in international trade policy at law firm Akin Gump. <\/p>\n

\u201cThese threats of much higher tariffs do create an action forcing event, where the two sides are either going to come to an agreement or they aren\u2019t,\u201d she added. <\/p>\n

\u201cThe American point of view is that the Europeans don\u2019t understand that this time is different, and it\u2019s not a conventional negotiation,\u201d said Reinsch at CSIS. <\/p>\n

On Friday, EU trade commissioner Maro\u0161 \u0160ef\u010dovi\u010d spoke with US commerce secretary Howard Lutnick and trade representative Jamieson Greer, but there did not appear to be a breakthrough. <\/p>\n

\u201cEU-US trade is unmatched & must be guided by mutual respect, not threats. We stand ready to defend our interests,\u201d \u0160ef\u010dovi\u010d wrote<\/a> on X after the discussions.<\/p>\n

EU officials chafe at Trump\u2019s demands, questioning why the world\u2019s biggest trading bloc should offer unilateral concessions.<\/p>\n

They argue that there is only about a 1 percentage point difference between EU and US tariffs and say that value added tax is roughly equivalent to US sales tax.<\/p>\n

Brussels is also reluctant to give the US market access denied to other countries, which would breach World Trade Organization rules.<\/p>\n

Officials also point out that while trade policy is handled by the European Commission, many of the barriers the US has issues with are national.\u00a0<\/p>\n

\u201cEU negotiators should hold their nerve. It certainly signals Washington\u2019s edginess and impatience to get a deal,\u201d said Georg Riekeles, associate director at the European Policy Centre in Brussels. <\/p>\n

Riekeles urged the EU to copy Canada and China by retaliating strongly. \u201cIf the EU is ready to fight back, US bullying and escalation is ultimately so self-harming that you can enter deal territory.\u201d<\/p>\n

However, countries such as Ireland and Italy, which rely on US exports, have lobbied hard against strong countermeasures \u2014 and Trump will be counting on schisms within the bloc to force the EU\u2019s hands.<\/p>\n