Trump hits 'pathetic' EU with 20% duty as reciprocal tariffs ignite global trade war

Donald Trump slapped 20% duties on EU exports on Wednesday, as the US President announced much vaunted “reciprocal tariffs” on trading partners that sent shockwaves across the global economy.

The duties, which aim to mitigate the “unfair” trade barriers other countries impose on US goods, came as the self-proclaimed “Tariff Man” imposed sweeping duties of at least 10% on dozens of other countries, including China, India, and the UK.

“For decades, our country has been looted, pillaged, raped, and plundered by nations near and far, both friend and foe alike,” Trump said, adding that farmers and workers in the steel and automotive sectors had “suffered gravely” as a result of former US administrations’ leaders’ trade policy.

Trump also specifically accused the EU of imposing an effective tax rate of 39% on US goods and singled out the bloc’s VAT and automobile tariff rates, as well as its “non-tariff barriers” on US poultry.

“European Union, they’re very tough… very friendly. They rip us off. It’s so sad to see. It’s so pathetic,” he said.

He also declared duties of 34% on China, 31% on Switzerland, 26% on India, 25% on South Korea, 24% on Japan, 10% on the UK, and levies on multiple other countries.

“We will charge them approximately half of what they are and have been charging us,” Trump said. “This is not ‘full’ reciprocal. This is ‘kind’ reciprocal.”

Trump added that countries would be able to avoid the tariff by manufacturing their products in the US. “If you want your tariff rate to be zero, then you build your products right here in America,” he said.

The euro whipsawed against the dollar following Trump’s announcement, surging from $1.085 to $1.09 before dropping back again to $1.086 as of 11.30 pm CET.

The duties follow Trump’s repeated condemnation of the US’ global trade deficit, which he claims has hollowed out America’s manufacturing sector and results from other nations’ “unfair” trade barriers.

The EU sells more goods to the US than it buys, with its trade surplus growing from €156.6 billion to €198.2 billion from 2023 to 2024, according to the Commission.

Yet, EU officials argue that the transatlantic trade relationship is “balanced” due to the bloc’s deficit in services, which ran to €108.6 billion in 2023.

Wednesday’s announcement caps a tumultuous two-and-a-half months in global trade since Trump’s return to the White House.

Trump has imposed 25% duties on steel and aluminium, automobiles, and goods from Mexico and Canada. He has also introduced an additional 20% levy on all Chinese imports.

The Commission said on Wednesday it would retaliate against the steel and aluminium duties on April 13 and issue a joint response to the automobile and reciprocal tariffs at a later date.

Brussels, however, said its “priority” is to negotiate an agreement with Washington to “avoid the inevitable pain” that tariffs would inflict on both the US and EU economies.

European Commission President Ursula von der Leyen will deliver a statement on Trump’s tariffs at 5 am CET on Thursday.

EU trade ministers will also discuss transatlantic relations with Commissioner for Trade Maroš Šefčovič in Luxembourg on Monday.

[MM]