The U.S. President Trump stated on Sunday (February 2nd) that the U.S. will impose tariffs on the European Union (EU) in the near future, but the UK might be able to avoid tariffs. EU leaders have warned that a trade war could harm the interests of both sides.
Trump mentioned that due to the U.S. trade deficit with the EU, following the widespread tariffs imposed on goods from Canada, Mexico, and China, the EU is the next target.
When asked if the UK would face tariffs, Trump said he would assess the situation as it unfolds.
He believes that the UK’s issue “can be resolved.” He said, “Prime Minister Stamer has been very friendly. We have had several meetings and numerous phone conversations. We get along very well. We will see if we can balance our budgets.”
A spokesperson for the UK government stated that the U.S. is an indispensable ally and a close trading partner.
The spokesperson said, “We have a fair and balanced trade relationship that benefits both sides. We look forward to working closely with President Trump to continue advancing trade relations between the UK and the U.S. for the benefit of our economy, businesses, and the British people.”
Stamer and his ministers have been emphasizing the amount of goods imported from the U.S. to the UK since Trump’s election and hope to avoid tariffs given the economic challenges facing the UK.
Due to differences in methodologies between national statistical agencies, both the UK and the U.S. report trade surpluses with each other.
According to UK data, as of the end of the third quarter of 2024, the trade surplus of goods between the UK and the U.S. was £1.9 billion (USD 2.3 billion).
During the same period, the total trade volume between the two countries was £294 billion, making the U.S. the UK’s largest single trading partner. Less than one-third of this trade is goods, which may face U.S. tariffs, while the rest is services.
Regarding the possible imposition of tariffs on EU products by the U.S., EU leaders have warned that this could trigger a trade war, causing damage to the economies on both sides of the Atlantic.
EU’s High Representative for Foreign Affairs Kaja Kallas stated that if a trade war erupts between the U.S. and Europe, “the ones laughing on the sidelines will be China.”
She said, “We are closely interconnected. We need the U.S., and the U.S. needs us.”
German Chancellor Olaf Scholz called for cooperation between the EU and the U.S. He said, “It is clear that as a strong economic entity, we can shape our own future and respond to tariff policies… but our perspective and goal should be to achieve cooperative results.”
Friedrich Merz, leader of the German conservative opposition, expressed concerns that tariffs could backfire.
He said, “Trump may now realize that the tariffs he imposes do not have to be paid by those importing into the U.S.; instead, they must be borne by U.S. consumers.” Merz could become the next German leader in this month’s elections.
Francois Villeroy de Galhau, Governor of the Bank of France, stated that Trump’s tariffs would particularly impact the automotive industry. He said, “In this protectionist trade war, everyone will suffer losses.”
On Monday, European automakers’ stocks fell due to concerns about tariffs.
According to data from the EU statistical office, the quantity of goods exported from the EU to the U.S. has consistently exceeded the quantity imported from the U.S., with a trade deficit of €155.8 billion (USD 159.5 billion) in 2023.
However, the EU stated that in terms of services, the U.S. had an export surplus over imports from the EU in 2023, with a surplus of €104 billion.
(Reference from Reuters)