The European Union must try to avoid a trade war with the United States while preparing for such a scenario, according to a policy brief published by the Bruegel think tank on Monday 9 December. The authors give a number of suggestions for European responses to the potential tariff increases imposed by the future American president, Donald Trump.
While discussions between the two parties over the last four years have failed to resolve a number of trade disputes, Bruegel proposes new avenues of cooperation to try and avoid the imposition of new tariffs by Washington.
To establish a positive dynamic and move in the direction of American interests, the Europeans have, for example, room for manoeuvre to increase imports of energy, but also of American military equipment, as advised by the President of the ECB, Christine Lagarde.
To go further, the EU could decide to lower these basic tariffs on vehicle imports. This would lower the cost of American vehicles in the EU, but above all it would encourage Washington not to increase its tariffs on European cars.
However, these trade facilitation measures may not be enough to avoid the tariff increase promised by Mr Trump. This is why the EU should prepare a list of response measures that are sufficiently dissuasive, according to the authors of the note.
If Donald Trump applies a 20% increase on imports from Europe, the EU should be ready to apply the same recipe on American products, they believe. However, this would not apply to American goods on which the EU is dependent, adds Bruegel.
Finally, major work will be needed with other trusted partners in the World Trade Organization (WTO) to build a coalition of countries committed to WTO rules.
See the Bruegel brief: https://aeur.eu/f/epy (Original version in French by Léa Marchal)