Europe next in firing line for Trump tariffs after trade wars with US neighbours postponed

Mr Trump said tariffs on the 27-country bloc will 'definitely happen,' citing the US' long-standing trade deficit with the EU

Tue, 04 Feb, 2025 - 12:02

Emer Walsh

After declaring victory against the now postponed trade wars with Mexico and Canada, US President Donald Trump has set his sights on the 27-member European Union as his next target for punitive tariffs.

Phone calls between President Trump and respective leaders of the US' bordering countries brought a temporary hold to 25% tariffs being implemented on both Canada and Mexico, helped by a guarantee from both countries to meet US demands for heightened border security.

However, speaking on Monday evening, Mr Trump called the trade balance between the US and EU an "atrocity," nothing: "They've really taken advantage of us.

"They don't take our cars, they don't take our farm products, they take almost nothing. And we take everything from them."

Mr Trump added that tariffs on the 27-country bloc will "definitely happen," citing the US' long-standing trade deficit with the EU.

"It is an atrocity what they have done. Its a $350bn deficit, so obviously something is going to take place there."

The US is the top buyer of EU exports, accounting for nearly 20% of total goods exports in 2023, according to Eurostat.

Given Mr Trump's emphasis on food and farm products, Ireland, whose key exports to the US include Kerrygold butter and Jameson whiskey, will struggle to evade the impact of the president's punitive measures.

In the first 11 months of 2024, Ireland exported more than €67.4bn worth of goods to the US, with US imports into Ireland totalling just €20.7bn in the same period, figures from the Central Statistics Office (CSO) show.

Of those exports, €885m of Irish goods to the US were food and live animals, with a further €816m worth of beverages and tobacco also being sent across the Atlantic.

Meanwhile, Ireland imported just €341m worth of food and live animals from the US along with just €155m worth of beverages and tobacco.

Economists have almost universally criticised Mr Trump's use of tariffs, warning that it will severely disrupt long-standing supply chains between countries.

It is also widely agreed that the added price of such protectionist measures is largely paid for by consumers, which could prompt additional inflationary pressures across both Europe and the US, depending on the EU's retaliation.

The US president has long spoke about his desire to use tariffs more aggressively to fill government coffers as he looks to cut taxes elsewhere, as well as get even with countries he perceives as ripping off the US.

However, his decision to pause the Canada and Mexico tariffs leaves those goals unfulfilled for now, which for Mr Trump, may make his efforts to punish the EU all the more important.