President Trump’s threats to impose a 50% tariff on European Union goods could backfire, according to trade and freight experts. These tariffs are part of a broader trade war strategy, but not all countries are bending to Trump’s demands. European imports to the U.S. are essential for many manufacturing processes.
The tariffs could make it harder for companies to bring production back to the U.S. “A big tariff on European imports will backfire, making American products more expensive to produce,” said Andy Abbott, CEO of ocean carrier Atlantic Container Line. Experts say Trump’s negotiating tactics are facing resistance from the EU. This is making it hard to make progress.
Josh Teitelbaum, a senior counsel at Akin, said, “Trump is not wrong that the EU has been less forthcoming than other countries, but the EU also has good reasons for their stance. Thus, they are at an impasse.”
The threatened tariffs could also make products like iPhones more expensive. Recent data indicate that ocean freight bookings from the EU to the US have been on the rise.
But new tariff threats could reverse this recovery. “Europe was stable and steady,” said Abbott.
Tariff threatsare facing resistance
Manufacturers have told the Trump administration that any tariffs need to consider the cost impact on U.S. operations. U.S. exporters could also suffer, as reduced trade may lead to higher export rates. This would add costs to American products overseas.
The EU is a significant trading partner, and a 50% tariff could cause economic harm and provoke EU retaliation, further escalating the situation,” said Timothy Brightbill, a partner at Wiley and co-chair of its international trade practice. Dan Anthony, president of Trade Partnership Worldwide, said the impact of such tariffs would be felt across the U.S., varying by state based on their import structures. “Needless to say, a 50% tariff would be a huge, costly tax increase,” he said.
Brightbill also mentioned that while the administration wants to address long-standing trade problems with the EU, reaching the desired negotiations might be complex. “There are many long-standing trade problems with the EU, and this could provide an opportunity for both agricultural and digital trade negotiations,” he said. However, getting agreement within the EU remains a challenge.
Experts agree that increasing tariffs could create more economic harm than good. They urge caution in how the administration approaches these crucial international trade relationships.
