As President-elect Donald Trump prepares for his return to the White House, former officials from his administration are cautioning the European Union (EU) to expect aggressive trade policies, including significant tariffs and a departure from traditional EU-U.S. negotiation channels. These warnings signal a potential reshaping of transatlantic trade dynamics that could impact global commerce.
Kelly Ann Shaw, former deputy assistant to the president for international economic affairs, emphasized that Trump’s campaign rhetoric on baseline tariffs reflected his commitment to addressing trade disparities.
“President Trump spoke repeatedly on the campaign trail about this idea of a baseline tariff on all imports,” Shaw said. “The team believes that they have a mandate to pursue that after the overwhelming election victory.”
A key motivator for Trump’s approach is his perception of unequal tariff rates between the United States and its trading partners, including the EU.
“He’s trying to address that disparity and make our tariff rates more reciprocal,” Shaw explained, underscoring that Trump’s aim is to push for lower tariffs globally, including from Europe.
While the U.S. and EU average tariff rates are relatively close—3.3% and 5.0% respectively—specific disparities, such as the EU’s 10% tariff on passenger cars compared to the U.S.’s 2.5%, have long fueled Trump’s grievances. Agricultural tariffs also reflect an imbalance, with EU rates averaging 11.3% against the U.S.’s 4.8%.
Trump’s proposed solution is a sweeping tariff of up to 20% on all $3 trillion worth of U.S. imports, including $575 billion in European goods. This move, if enacted, would not only disrupt trade flows but could also violate World Trade Organization (WTO) commitments. Trump might attempt to justify the policy under national security provisions, a tactic he has used previously.
Everett Eissenstat, another former deputy assistant to the president, warned against underestimating Trump’s resolve.
“European leaders should not assume that Trump’s tariff threats are just a bluff,” Eissenstat said. “The president has been consistent in doing what he says he’s going to do, and the team he’s building is designed for this.”
Eissenstat also noted that Trump’s substantial electoral victory, including winning the popular vote, could embolden Congress to support his trade agenda despite historic Republican resistance to tariffs.
Trump’s strategy may also sidestep the EU’s central trade authority in Brussels, choosing instead to deal with individual member states.
“I think there’ll be less support for talking to the EU as the EU,” Eissenstat remarked, predicting that Trump will engage directly with key European capitals like Berlin, Paris, and Rome.
This approach aligns with former trade representative Robert Lighthizer’s critiques in his 2023 book, No Trade is Free, which singled out Germany, France, Ireland, and Italy as major contributors to U.S.-EU trade imbalances.
Eissenstat suggested that changing attitudes in Europe might make individual states more receptive to bilateral talks. Factors such as the ongoing war in Ukraine and internal EU competitiveness concerns could create opportunities for Trump to exploit divisions within the bloc.
From the European perspective, Trump’s potential tariff escalation is a serious threat that requires careful countermeasures. Ignacio García Bercero, a former European Commission trade negotiator, emphasized the importance of a strong but strategic retaliation plan.
“Let’s not be naive. Let’s not go to that conversation without already having a retaliation option,” García Bercero said during a recent event in Brussels.
However, he urged caution against matching U.S. tariffs dollar for dollar, warning of the economic harm such actions could inflict on the EU.
“Let’s assume the United States imposes 10 percent tariffs across the board,” García Bercero said. “That would be economically suicidal. There’s a lot we export to the United States that they need.”
Instead, he advocated for a more targeted approach, avoiding measures that would harm essential imports from the U.S.
“We must ensure that our retaliation is sophisticated,” García Bercero noted. “Hitting things we genuinely need from the United States would be counterproductive.”
Another factor driving Trump’s policy is the U.S. trade deficit with the EU, which has surged to a record $230 billion in 2024 despite earlier efforts to address it.
Trump views trade deficits as a reflection of unfair practices, rather than macroeconomic factors such as spending and savings rates, which economists widely believe play a larger role.
Non-tariff barriers—such as EU regulatory standards that hinder U.S. exports—also remain a sore point for American businesses. The U.S. Trade Representative’s 2024 report identified the EU as a significant trade challenge, dedicating 30 pages to detailing barriers, second only to China’s 44-page section.
Trump’s return to office marks a potentially contentious period for U.S.-EU relations, as both sides grapple with conflicting trade agendas.
For Europe, the stakes go beyond economic calculations. Trump’s unilateral approach threatens the cohesion of the EU by encouraging individual states to negotiate directly with Washington. At the same time, retaliatory tariffs could strain European consumers and industries dependent on U.S. imports.
Meanwhile, the U.S. risks alienating its European allies at a time when cooperation is critical, particularly in addressing challenges such as the war in Ukraine and competition with China.
The early warnings from Trump’s former officials highlight the possibility of a dramatic escalation in transatlantic trade tensions. For now, the EU must prepare for the dual challenge of countering Trump’s aggressive trade agenda while safeguarding its economic interests and unity.
As García Bercero put it, the EU must “go into these negotiations with open eyes” and ensure it has a credible plan to defend itself. Whether through strategic retaliation, bilateral diplomacy, or leveraging its global partnerships, Europe faces a pivotal moment in its relationship with the United States.
