The latest tariffs threat from US president Trump further exacerbates uncertainty with regards to trade policy. And it also shows that nothing is set in stone when it comes to any “trade deal” that has been struck. As a reminder, Trump threatened the EU with additional tariffs over the weekend unless “a deal is reached for the complete and total purchase of Greenland”.
He will be slapping 10% tariffs on “any and all goods” starting from 1 February and that will jump up to 25% on 1 June after.
The EU is already preparing to hit back and we’re now seeing some added commentary this morning from the region. French finance minister Roland Lescure says that:
- Blackmailing countries is unacceptable
- European countries must remain united
- We must be prepared to use the EU’s anti-coercion mechanism
- Will organise a G7 finance ministers’ meeting in the coming days
- We regret that there is an escalation btu Europe needs to be able to act autonomously
German finance minister Lars Klingbeil also chips in by saying:
- There will be a strong response to US tariffs
- EU is ready to finda solution with the US
- Have no interest in a Transatlantic escalation
Meanwhile, Norway prime minister Jonas Gahr Støre is also out saying that Trump’s tariffs announcement is “unacceptable”. That as Trump wrote a letter to Støre to say that he no longer felt an “obligation to think purely of peace”, clearly still reflecting his saltiness in not being awarded the Nobel Peace Prize by the Norwegian Nobel Committee.
The main question now is whether or not the EU is willing to go tit-for-tat with the US on tariffs in escalating the situation further. If the EU does intend to call Trump’s bluff in anticipating a TACO situation, they have to be prepared that things could get ugly before they get better. One doesn’t need to look too far back to the whole tariffs war with China last year for an example.
