Introduction of the New Tariff Plans
Starting August 1, 2025, the Trump administration plans significant changes to tariff policy. A base tariff of 30 percent will be imposed on imports from the EU, in addition to existing tariffs on specific sectors such as cars, auto parts, and steel and aluminum products. This represents a drastic increase compared to the previous tariff rates of around 10 percent.
Impact on the European Economy
The increase could have profound consequences for the European economy, particularly for companies with a strong dependency on exports to the USA. The uncertainties regarding future trade conditions unsettle the markets and significantly complicate long-term strategic planning for European firms. President Trump has also threatened further increases in tariffs if the EU takes countermeasures.
Rising Tariff Burdens
The average tariff rate in the USA has already risen to 17.6 percent due to recent measures, the highest level since 1934. Before Trump’s second term, it was only 2.4 percent. Besides the EU, other countries such as Mexico and Brazil are also affected by even higher tariffs.
Outlook and Negotiations
Although negotiations between Brussels and Washington are ongoing, no agreements have been reached so far. The US’s political strategy seems to lean more towards confrontation and high punitive tariffs, resulting in increased uncertainty in the markets and potentially stifling the growth of European export companies.
Main Points:
- New base tariff of 30% on EU imports
- Existing sector tariffs remain in place
- US average tariff rate has risen to 17.6%
- Threat of further tariff increases with EU countermeasures
- Burdens on European export companies due to uncertainties
These developments illustrate a significant escalation in the trade conflict under President Trump, with potentially negative consequences for the European economy in 2025.