Trump’s tariffs could trigger EU-US decoupling, warns Brussels’ trade chief

Donald Trump’s threatened 30% tariff on European exports would "practically" end EU-US trade and could herald the end "as we know it” of the €1.6 trillion transatlantic relationship, EU Trade Commissioner Maroš Šefčovič said on Monday.

Šefčovič said the US president’s latest tariff threat, announced on Saturday, would have “super negative” consequences if it enters into force on 1 August by disincentivising EU exporters from shipping goods to the US.

"30% or anything above 30%... it has more or less the same effect: practically, it prohibits trade," Šefčovič told reporters ahead of a meeting of EU trade ministers in Brussels.

"If it stays at 30%-plus, simply the trading as we know it will not continue," he added, noting that he would “definitely do everything” to prevent the measure from taking effect.

Šefčovič also stressed that the Commission remains prepared “if necessary” to impose retaliatory countermeasures to “restore the balance in our transatlantic relationship." He added that he would speak to his US counterparts later on Monday.

Brussels has already drawn up a retaliatory package targeting €21 billion worth of US exports, which was originally set to take effect on Tuesday but whose imposition was delayed until the start of next month following Trump's threat over the weekend.

The Commission has also prepared a separate €72 billion list that it will present to EU ministers on Monday, which could also be introduced on 1 August if no negotiated solution is reached.

Trump has already imposed a 50% tariff on steel and aluminium, a 25% duty on cars, and a 10% blanket levy since returning to the White House in January, which collectively affect €370 billion worth of EU exports, or 70% of the bloc’s total shipments to the US.

The possibility of a protracted trade conflict with the EU's main ally was echoed on Monday by Danish Foreign Minister Lars Løkke Rasmussen, who warned that a trade war with the US would have "devastating" consequences on both sides of the Atlantic.

"We want the deal, but there's an old saying: 'If you want peace, you have to prepare for war'," said Rasmussen, whose country currently holds the rotating EU Council presidency and who will chair Monday's meeting.

Some ministers, however, said that the EU was prepared for a prolonged trade conflict.

Sweden's Trade Minister, Benjamin Dousa, said Brussels has "more tools in the toolbox" that it could use to hurt US exporters – a thinly veiled reference to the EU's 'anti-coercion instrument', which, if invoked, could target US services and whose use is supported by French President Emmanuel Macron.

"I think if the White House wants us to be tough, then we will be quite tough against the White House," Dousa said.

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CORRECTION: An earlier version of this article referred to Lars Løkke Rasmussen as Denmark’s trade minister. Rasmussen is Denmark’s foreign minister, but trade falls under his portfolio.