2025-04-03T17:01:38.000Z

In a significant escalation of trade tensions, European leaders are bracing themselves for a potential economic confrontation in the wake of the United States' unexpected decision to impose a 20% blanket tariff on various imports from the EU. This move was labeled a "catastrophe for the economic world" by French Prime Minister François Bayrou, whose stark assessment captures the widespread concern among European nations. Ursula von der Leyen, the President of the European Commission, echoed these sentiments during her visit to Central Asia, warning that the implications of such tariffs could be dire for millions globally. As the EU prepares to respond on behalf of its 27 member states, the overarching message is clear: Europe is open to negotiations while simultaneously readying countermeasures to protect its economic interests.

In light of these developments, EU Trade Commissioner Maros Sefcovic is scheduled to engage in discussions regarding tariffs with his US counterparts this Friday. Sefcovic emphasized the importance of a measured response, stating, "We'll act in a calm, carefully phased, unified way, as we calibrate our response, while allowing adequate time for talks." However, the gravity of President Donald Trump's decision weighs heavily on all European countries, prompting national governments to assuage concerns among industries that could be adversely affected.

Italy, under the leadership of Prime Minister Giorgia Meloni, has notably shifted its stance from initial reluctance to actively preparing for immediate discussions. Meloni summoned ministers and business leaders for an emergency summit, recognizing the potential impact on Italy’s agrifood exports, which amount to €1.6 billion (£1.35 billion), alongside €2 billion in wine exports to the US. Alessandro Apolito of Coldiretti, Italy's main farmers' organization, expressed that aside from direct economic losses, there exists a tangible risk that American consumers may opt for imitations of Italian products, thereby jeopardizing the market share of authentic Italian goods.

Spanish Prime Minister Pedro Sánchez also weighed in, vehemently rejecting President Trump's assertion that the EU imposes 39% tariffs on US goods, clarifying that the actual figure is a mere 3%. He described the US tariffs as an "excuse to punish countries and implement sterile protectionism," while warning that this trade war will ultimately harm those who initiate it the most. His government has rolled out a €14.1 billion response plan, aimed at supporting businesses through financial assistance and facilitating the exploration of new markets beyond the American landscape.

Among the EU member states, Slovakia faces a particular vulnerability due to its substantial reliance on industrial exports. Some economists are forecasting a steep decline in Slovakia's economic output by at least 2.5% over the next two years, a trend echoed by Poland, where Prime Minister Donald Tusk warned of a potential 0.4% decline in economic output for this year. In anticipation of the tariffs, the French government had already adjusted its growth predictions for the year downward to 0.7% even before Trump's tariffs were announced.

The French wine and spirits sector is expected to bear the brunt of these tariffs, with Jérôme Bauer, head of a prominent wine organization, predicting a net loss of €1 billion (£835 million) to France’s wine industry. Italian winemakers are equally anxious, with Stefano Leone of Marchesi Antinori—a winery boasting over six centuries of heritage—stating, "We’ve halted exports for almost two weeks now. Everything is paralyzed; clients aren’t placing orders and importers aren’t importing." The US comprises roughly 12% to 13% of their total sales, placing them in a state of uncertainty as they await guidance on how to proceed based on the EU's potential countermeasures and the hope for constructive negotiations.

Market sentiment across Europe has turned pessimistic, with investors rapidly divesting from stocks perceived as vulnerable to the sanctions. The German sportswear giant, Adidas, saw its stock plummet by 12% in response to the news. Both small and large enterprises are bracing for the fallout. Rocco Mangiaracina, who manages a family-run business in Sicily that produces 20,000 bottles of olive oil annually, lamented, "This is the first year we’ve started exporting to the United States, and the tariffs affect us even more directly. Just a week ago, we sent our first 900 bottles to the American market."

French government spokeswoman Sophie Primas assured, "We are ready for this trade war," but emphasized that the European Union must remain strong and united in its response. Germany, the EU's largest economy, described the tariffs as an "unprecedented attack on the international trading system, free trade, and global supply chains." As the nation eagerly awaits the formation of a new government under chancellor-in-waiting Friedrich Merz, acting Chancellor Olaf Scholz underscored the strength of the European Union, referencing its vast internal market of 450 million consumers. The question remains: how will the EU respond, and can it maintain a cohesive front amidst these mounting pressures?

www.bbc.com