Trade war and peace: Three scenarios and policy options available to the EU and the German government in negotiations with president Trump

Laura von Daniels

No 33/2025, SWP Comments from Stiftung Wissenschaft und Politik (SWP), German Institute for International and Security Affairs

Abstract: The United States (US) and European Union (EU) are at risk of entering a full-blown trade war. Three months ago, on "Liberation Day", US President Donald Trump imposed high import tariffs on almost all countries, including the EU. He then suspended them at short notice to negotiate with over 90 of the affected trading partners. At the beginning of July, when the tariffs were due to come into force, Trump again postponed the tariffs on the EU and other countries by an additional month. In a letter to the EU, Trump threatened higher tariffs, namely 30 per cent, from 1 August. This back and forth shows that Member States must prepare for an escalation of the conflict - one that could go far beyond tariffs and even jeopardise the security of the EU.

Keywords: USA; EU; Germany; Donald Trump; European Commission; Federal Government; tariff policy; tariff dispute; tariff war; trade war; trade instruments; tariffs; import tariffs; "reciprocal tariffs"; ACI; Anti-Coercion Instrument; security of the EU; Nato; Greenland (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-eec and nep-mac
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/324886/1/1931718458.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:swpcom:324886

DOI: 10.18449/2025C33

Access Statistics for this paper

More papers in SWP Comments from Stiftung Wissenschaft und Politik (SWP), German Institute for International and Security Affairs
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().