What Europe Stands To Lose From Trump's Latest Threatened Tariffs

2025-03-24 15:12:00 ET

Summary

• If Donald Trump goes ahead with his threat of more tariffs against the EU next week, we calculate that could knock 0.33% off GDP growth in the short term.
• It would be a real blow to more exposed economies desperate to reverse stagnating trends. And over time, that figure could soar.
• The indirect exposure to the US market via other countries affected by US tariffs, such as China, Canada, and Mexico, is rather limited.

By Ruben Dewitte

Anxiety levels are rising in Europe

When the US is your most important trading partner and it's threatening still more tariffs on you, the European Union can be forgiven for feeling anxious. Donald Trump is expected to announce more trade-war charges on many countries on 2 April; he's called it a 'liberating day' for America. We reckon a 25% US tariff on Europe could reduce the EU's GDP by 0.33% in the short term, considering the direct impact on exports. While that might sound marginal, when your economies have been stagnating for months, if not years, the cost will be considerable. And could rise even more over time....

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