Reciprocal tariffs could be imposed by the Trump administration as early as April 2, 2025, accelerating efforts in capitals worldwide — particularly in Europe — to initiate negotiations with Washington and prevent their implementation. The US president had particularly harsh words for the EU, referring to the longtime US ally as “very nasty.” He criticized the bloc over its value-added tax system, digital services tax and legal actions against US tech companies. “The European Union has been very tough on our companies,” Trump said. “They’ve sued Apple, Google, Facebook, and many other American companies… The court system over there is not very fair to us.” The EU has vowed to respond “firmly and immediately” to Trump’s announcement of reciprocal tariffs on all US imports, signaling a potentially tougher negotiating stance from Brussels toward the new US administration. The clash of perspectives between Europe and the United States was evident at the Munich Conference on February 14, 2025. US Vice President JD Vance struck a confrontational tone, accusing European politicians of scaring their own people and warning that the greatest threat to their democracies does not come from Russia or China. “The threat I worry about most when it comes to Europe is not Russia, not China, nor any other external actor. What concerns me most is the threat from within — the retreat of Europe from some of its most fundamental values, values it shares with the United States of America,” Vance said. In this tense political climate, the reinstatement of tariffs under the Trump administration could have profound consequences for EU-US relations, impacting economic ties, political trust and strategic cooperation.
The EU and the United States are each other’s largest trading partners, with bilateral trade in goods and services exceeding 1 trillion euros annually. Tariffs on EU exports, such as automobiles, machinery and pharmaceuticals would disrupt established supply chains and increase costs for businesses and consumers on both sides of the Atlantic. Prolonged tariffs could incentivize companies to reconfigure supply chains to avoid tariff-related costs. For example, European firms might shift production to the United States or other countries, while US companies could seek alternative suppliers outside the EU. While this might reduce tariff exposure, it would also disrupt longstanding economic ties and reduce efficiency, particularly in industries with complex, transatlantic supply chains like the automotive and aerospace sectors. For example, Trump’s previous threats to impose a 25% tariff on European cars could severely impact German automakers like Volkswagen and BMW, which depend heavily on the US market.
Trump’s tariff policies could face opposition from US businesses, consumers and lawmakers. Industries reliant on European imports, such as manufacturing and retail, may lobby against tariffs, citing higher costs and reduced competitiveness. Domestic political pressures could limit the scope and duration of tariff measures.
On the European side, Brussels has developed tools to respond to trade disputes, such as the Anti-Coercion Instrument, which allows it to retaliate against economic coercion. Additionally, the EU’s diversified trade portfolio and internal market of 450 million consumers provide a buffer against external shocks. These factors could help the EU weather the impact of US tariffs.
During its first term (2017–2021), the Trump administration imposed tariffs on key EU exports, including steel and aluminum, citing national security concerns. These measures strained transatlantic ties and prompted retaliatory tariffs from the EU on US goods like bourbon, motorcycles and agricultural products. The EU has historically responded to US tariffs with retaliatory measures. In 2018, the EU imposed tariffs on $3 billion worth of US goods in response to steel and aluminum tariffs.
A new wave of US tariffs could trigger similar countermeasures, potentially escalating into a broader trade war. These tit-for-tat dynamic risks undermine the World Trade Organization (WTO) framework, as both sides may bypass multilateral dispute resolution mechanisms. This could encourage other countries to adopt protectionist measures, leading to a more fragmented and unstable global trade environment.
EU-US relations have historically been anchored in shared democratic values, economic interdependence and security cooperation through NATO. However, tariffs could exacerbate existing tensions, particularly if the EU perceives them as “unlawful.” During Trump’s first term, his administration’s trade policies were seen as undermining transatlantic solidarity, with some EU leaders questioning the reliability of the United States as a partner. A repeat of such policies could deepen mistrust.
The EU and the United States have historically enjoyed a cooperative economic relationship, but trade disputes risk souring diplomatic relations. European leaders are likely to view a new round of tariffs as a unilateral and protectionist move, undermining trust and collaboration on broader issues such as NATO funding, climate policy and regulation regarding technology.
The EU has increasingly pursued an “open strategic autonomy” agenda, seeking to reduce dependence on external partners through diversified trade agreements and strengthened domestic industries. Tariffs could accelerate this shift, pushing the EU to deepen trade ties with other regions such as Asia-Pacific or Latin America. For example, the EU has already signed trade deals with Japan, Canada and Mercosur (the Southern Common Market), which could serve as alternatives to the US market. Moreover, since the election of Trump, the EU has also been seeking to broaden its horizons and has announced a strengthened trade agreement with Mexico and the resumption of negotiations on a free trade agreement with Malaysia.
Tariffs could inadvertently strengthen the EU’s resolve to pursue greater strategic autonomy, reducing its reliance on the United States for economic and security needs. This shift could have long-term implications for NATO as the EU might prioritize investments in its own defense capabilities, such as the European Defense Fund, over reliance on US-led initiatives. While this could enhance EU sovereignty, it might also weaken transatlantic unity at a time when geopolitical competition with China and Russia is intensifying.
A fractured EU-US relationship could create opportunities for China to expand its influence in Europe. Beijing has already sought to deepen economic ties with the EU through initiatives like the Belt and Road Initiative (BRI) and investments in critical infrastructure. Tariffs could push the EU to seek alternative markets and suppliers, potentially increasing its economic engagement with China. This dynamic could complicate Western efforts to counter China’s global ambitions.
The reimposition of tariffs under the Trump administration would have far-reaching implications for EU-US relations, affecting economic ties, political trust and strategic cooperation. While the immediate economic impact could disrupt trade flows and increase costs, the long-term consequences could be even more profound, potentially accelerating EU strategic autonomy and weakening transatlantic solidarity. At the same time, both sides have incentives to avoid escalation, given their shared interests in addressing global challenges and countering geopolitical rivals. The EU and the United States have a history of resolving trade disputes through negotiations. For example, in 2021, both sides agreed to suspend tariffs related to the Airbus-Boeing dispute, signaling a willingness to de-escalate tensions. Similar diplomatic efforts could mitigate the impact of new tariffs, particularly if both sides prioritize broader strategic interests, such as countering China’s influence. The coming years will test the resilience of the EU-US partnership, as both sides navigate the delicate balance between economic competition and strategic alignment.
