‘Nasty' EU finds itself at the back of Trump's trade deal queue

Telegraph

13-05-2025

Donald Trump has doused EU hopes that his rapprochement with Britain and China might quickly lead to a trade ceasefire with Brussels.
As he announced his breakthrough with Beijing on Monday, Mr Trump turned his fire on the EU, describing the bloc as 'nastier than China'.
'They treated us very unfairly,' Mr Trump told reporters. 'They sell us 13m cars. We sell them none. They sell us their agricultural products. We sell them virtually none. They don't take our products. That gives us all the cards.
'The European Union is in many ways nastier than China, and we've just started with them. Oh, they'll come down a lot. You watch.'
Although the EU last Thursday said it was ready to hit the US with tariffs on €95bn (£80bn) of American imports, Mr Trump that same day described European Commission president Ursula von der Leyen as 'fantastic' and said, 'I hope we're gonna meet'.
This was taken as a signal that Mr Trump might be open to doing a deal with the EU, a bloc he has previously said was created explicitly to 'screw' the US.
Pressure is now growing on the EU to strike a deal, particularly as Japan and Korea may also agree terms with Mr Trump on tariffs before Brussels gets a look-in.
Europe's powerful business lobby is growing increasingly skittish at the prospect of a trade war erupting with the US when the 90-day tariff pause elapses in early July.
Fredrik Persson, BusinessEurope's president, has urged the two sides to eliminate the existing tariffs and commit to avoiding any further levies.
'We should preserve tariff-free arrangements that support our companies in key sectors such as aerospace, spirits, and medical devices,' he said.
Maros Sefcovic, the EU trade negotiator, has been to Washington in the past month to hold initial talks, while tech commissioner Henna Virkkunen will also head to the US on Tuesday.
Mr Trump has complained about the EU's crackdown on US tech companies, an issue that may have to be folded into any deal on tariffs.
At the weekend, Ms von der Leyen said she would meet Mr Trump only if there was a 'concrete package to discuss'. But the president's comparison of the EU and China has dialled down expectations of a breakthrough.
Trade experts questioned Mr Trump's claim that the EU was 'nastier' than China.
'It is true that the EU does impose some tariffs and regulatory barriers to US trade, but they are not comparable to China,' says Sam Lowe, a partner at advisory firm Flint Global. 'The EU average applied tariff is very low.'
Before Mr Trump re-entered the White House, the average US tariff rate on imports from the EU was just under 1.5pc, while the EU's average tariff on US imports was 1.35pc.
But during the president's 'liberation day' announcement on April 2, Mr Trump hit the EU with a 20pc reciprocal tariff, plus a 25pc tariff on imports of vehicles and car parts.
A week later, he suspended the reciprocal tariffs, including the EU's 20pc rate, for 90 days to allow the White House to fix bilateral deals.
Mr Trump last week nailed down the first such deal with Britain, and on Monday announced the details of a major climbdown in his tariff war with China.
'Zero for zero' tariff package
But the EU remains in limbo. If the 20pc US tariff comes into force in early July, it will hit €379bn of EU exports to the US, while the 25pc tariff piles more pain on €50bn-plus of automotive goods.
The Bruegel Institute estimates that a no-deal outcome across the Atlantic could wipe 0.7 percentage points off US GDP, and 0.3 points off the EU's economy.
Brussels could even unleash its 'anti-coercion instrument', originally created to face down threats from China, against US services sectors like tech and banking.
Mr Trump's preference for personal relationships and his suspicion of the bloc have left Europe's individual leaders having to do much of the diplomatic heavy lifting with the US president.
French president Emmanuel Macron, Ireland's taoiseach Micheál Martin, Germany's Friedrich Merz and Italy's Giorgia Meloni have all tried their own individual charm offensives.
But Mr Trump has a personal beef with some of these countries, ranging from Ireland's wooing of US tech and pharmaceutical companies to Germany's 'freeloading' of US defence.
The EU has also struggled to move as quickly in trade talks with countries like China and the UK, because it must build consensus among its 27 member states.
However, given its single market boasts 460m consumers, the bloc will no doubt have undeniable heft once trade negotiations begin in earnest.