The European Union has given a warning to the American President Donald Trump and stated that it is ready to counterattack what it terms as ‘hurtful’ tariffs as Trump seeks to export the trade war to the entire world. Some of the most influential politicians in Europe, such as Olaf Scholz, the German Chancellor, have stated that the EU has “its own ways” of responding to the issue. This is even as Trump accused the EU of having “treated the United States badly” and plan to levy tariffs on the bloc, as he did to Canada, China and Mexico.
On the other hand, Sir Keir Starmer is set to be the first UK Prime Minister after Brexit to attend an EU summit. To be held on Monday in Brussels, the visit is part of a “reset” of UK-EU relations. It has been reported that Sir Keir is set to offer a number of concessions in a bid to enhance the UK’s relationship with the EU, which may include joining an EU-sponsored trade agreement and changing the visa regulations for young Europeans in the UK.
However, opposition leaders have warned that the EU relations should not be addressed at the expense of the relations with the US especially when Trump is the president. Shadow Business Secretary Andrew Griffith demanded that Sir Keir should change the focus from a trade deal with the United States.
After Trump announced that he was imposing a 25% tariff on goods coming from Mexico and Canada, as well as a 10% tax on Chinese imports, both Canada and Mexico promised to retaliate, while China said it was prepared to go to court and suggested that there could be more retaliatory measures.
This is in line with the stance of the Europeans on retaliation; a source from the EU explained the possible countermeasures that the US tariffs could warrant, and stressed that the focus should be on large products. For instance, France’s Industry Minister Marc Ferracci argued that it was important for the response to be effective while Klaas Knot from the Dutch Central Bank called on the EU to be more aggressive in its approach by virtue of being a market of 400 million people.
It has been reported that the EU had even made plans for the case of a trade war the year before, and some of these plans involved how to increase US imports like liquefied natural gas. If these fail, the EU could levy duties of more than 50 per cent on various US imports, as reported by the Financial Times.
British Home Secretary Yvette Cooper shared the concerns of the global economic effects of Trump’s tariffs. The UK’s main focus is on the development of trade relations with the United States, the European Union, and other countries.
At Chequers, Sir Keir stressed that he would prioritize a ‘strong trading relationship’ with Trump, while Kemi Badenoch urged Sir Keir to preserve the ‘five freedoms’ of Brexit when negotiating with the EU leaders. These include the ability to have trade relations with other countries that are not members of the single market and the ability to control the borders that are not part of the Schengen area.
Brexit supporter and Reform UK leader Nigel Farage believes there is a possible Brexit benefit of avoiding EU tariffs if certain conditions are met. However, he expressed concern about the alliance with the ‘divided’ EU and was worried about Sir Keir’s visit to Brussels.
The main issues of the Brussels summit will be defense and security; the UK is planning to get the procurement contracts and the framework of the regular meetings with the EU. Sir Keir will have the chance to explain the principles of the improved relations during the EU leaders’ dinner on Monday.
Home Secretary Cooper suggested ideas that would improve free trade and decrease ‘friction’ and ‘bureaucracy’, which may be through the Pan-Euro Mediterranean Convention (PEM). Critics have lambasted such a move, but Cooper explained that the UK remains outside of a customs union and is instead focusing on cutting down on business red tape.
In Brussels, Sir Keir will be pushing other European countries to keep the pressure on Vladimir Putin after Trump suggested that the West should impose more sanctions on Russia if it continues to invade Ukraine. The UK has imposed sanctions on around 2,100 Russian individuals and entities since the 2022 invasion.
Just a day before the Brussels meeting, Sir Keir emphasized the importance of the affected countries’ partners to act, pointing out that Trump’s proposed sanctions could have a destabilizing effect on Putin. The focus remains on the energy revenues of Russia and the destruction of its military supply chain to expedite the peace.
