European leaders warned Monday they would take a firm stance if U.S. President Donald Trump imposes tariffs on European goods, as officials gathered in Brussels to discuss defense and economic policy. While the meeting was set to focus on military funding and security cooperation, the looming threat of U.S. trade restrictions dominated discussions.
Trump, who announced sweeping tariffs on goods from Canada, Mexico, and China over the weekend, said European goods would "definitely" be next. The comments raised fears of an escalating trade conflict between Washington and its largest economic partner.
"If our commercial interests are attacked, Europe, as a true power, will have to make itself respected and therefore react," said French President Emmanuel Macron upon arriving at the summit.
Trump Signals Tariff Action on EU Imports
Trump's comments over the weekend provided no specific timeline for the tariffs but left little doubt about his intentions.
"It will definitely happen with the European Union," Trump told reporters Sunday night. "They've really taken advantage of us. We have over a $300 billion deficit. I wouldn't say there's a timeline, but it's going to be pretty soon."
The United States is the largest export market for the European Union, with trade flows surpassing $1.3 trillion annually. The EU primarily exports automobiles, pharmaceuticals, and industrial machinery, while it imports U.S. energy products such as oil and natural gas.
European Leaders Pledge a United Response
In response to Trump's remarks, European leaders signaled unity, vowing to defend the continent's economic interests while also pursuing diplomatic solutions.
- German Chancellor Olaf Scholz stated that while the EU is prepared to react, "the goal should be that things result in cooperation."
- EU foreign policy chief Kaja Kallas warned of the economic damage from a trade war, emphasizing, there would be "no winners in a trade war".
- Polish Prime Minister Donald Tusk called a trade war "a complete mistake", saying that in the face of "Russian threats and Chinese expansion," Western allies should avoid economic disputes.
- Danish Prime Minister Mette Frederiksen took a tougher stance, saying that while Europe does not support trade wars, "[if the Trump administration imposed] tough tariffs on Europe, we need a collective and robust response."
EU Preparing Countermeasures
European officials confirmed that the EU has been preparing for months for possible tariffs from the U.S. and would respond accordingly.
A spokesperson for the European Commission told CNBC: "The EU firmly believes that low tariffs drive growth and economic stability. However, we would respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs on EU goods."
The EU previously retaliated against Trump's tariffs during his first term, imposing levies on Harley-Davidson motorcycles, bourbon whiskey, denim, and orange juice-targeting goods from politically sensitive U.S. states.
French Industry Minister Marc Ferracci suggested that any EU response should be "biting" and target key U.S. industries, ensuring "an impact on the American economy to have a credible threat in negotiations."
Energy Deals as a Bargaining Tool?
One possible avenue to reduce tensions could involve European energy purchases.
A senior EU diplomat told CNBC that increasing imports of U.S. liquefied natural gas (LNG) could help prevent an escalation. "The EU can still negotiate, including by buying more LNG, but it will be very hard to avoid an escalation," the diplomat said.
Europe remains heavily dependent on energy imports and has worked to diversify away from Russian gas since the Ukraine war began. In 2023, the U.S. became Europe's top supplier of LNG, and some policymakers believe expanded energy deals could serve as leverage in trade talks.
Germany, France, and Spain Warn Against Protectionism
Several European financial officials and policymakers have warned of the consequences of a protectionist U.S. trade policy.
- Germany's likely next chancellor, Friedrich Merz, said tariffs would ultimately harm American consumers, stating, Trump will soon realize the tariffs "that will not have to be paid by those who import into America ... but by consumers in America."
- François Villeroy de Galhau, governor of France's central bank, called Trump's tariffs "brutal", warning that they would increase economic uncertainty and weaken global trade stability.
- Spain's economy minister, Carlos Cuerpo, emphasized the EU's commitment to free trade but insisted that Europe would protect its industries if necessary.