US President Donald Trump has reignited his trade war rhetoric and has indicated he will impose tariffs on the European Union.
Since winning his second presidency, Trump vowed to return to his aggressive trade policies with allies, notably the EU, by putting American commercial interests first.
On Tuesday, Trump finally spoke out on the issue of imposing EU tariffs. He had ignored the topic during his inauguration ceremony, with many capitals around the world having breathed a sigh of relief.
But now Trump has redirected his attention to Brussels and the EU.
"The EU is very bad for us. They treat us very badly. They don't take our cars or our agricultural products. In fact they don't take much at all’, said the US President, who added "so they're good for tariffs".
He further claimed that the US runs a trade deficit of $350 billion with the EU, though official US figures put the deficit at around $131 billion in 2023, according to data from the White House Trade Representative (USTR).
For Trump, the EU disproportionately benefits from this trade deficit. He singled out Germany, France, Ireland, and Italy as key contributors to the imbalance.
European Commission President Ursula von der Leyen said on Tuesday the EU wants to negotiate with the United States. She warned of the risk of a "global race to the bottom" using tools such as trade tariffs.
There are reports that the EU may buy more liquified gas as a gesture of goodwill, but the bloc has also stated it will prepare countermeasures. Speaking to CNBC on the sidelines of the World Economic Forum in Davos, European Commissioner for the Economy Valdis Dombrovskis said the EU will not hesitate to respond with countermeasures.
"If there is a need to defend our economic interests, we will be responding in a proportionate way," Dombrovskis said. "We’re ready to defend our values and also our interests and rights if that becomes necessary."
Moreover, Trump announced that Chinese products will be taxed at 10% from 1 February, with Beijing promising in response to defend its ‘national interests’.
"China is aggressive, but it's not just China. Other countries are also major aggressors," he stated.
