AP: US-EU Tariff War Looms, 9.5 Trillion Dollar Economic Ties Face Collapse
AP, July 6th. The final deadline for President Trump to impose tariffs on EU goods is approaching, and the world's largest bilateral trade relationship faces the risk of collapse. If an agreement is not reached by July 9th, the United States will impose punitive tariffs of up to 50% on EU goods, while the EU has prepared a countermeasure list worth 22 billion euros. This trade war will directly affect the transatlantic commercial link valued at 9.5 trillion dollars annually, impacting thousands of products ranging from French wine, German luxury cars to Italian cheese.
Trump's administration announced in early April that it would impose a 20% import tax on EU products, covering multiple sectors such as steel, automobiles, luxury goods, and pharmaceutical products, but later reduced the rate to 10% and granted a 90-day negotiation period. According to EU statistics, the total value of goods and services trade between the two sides reached a record high of 1.7 trillion euros (about 2 trillion US dollars) in 2024, with a daily transaction volume of 4.6 billion euros. In the goods trade, the EU had a surplus of 198 billion euros, while the US held an advantage in the service trade, narrowing the overall surplus to 50 billion euros. Currently, negotiations are deadlocked. EU Commission President Ursula von der Leyen admitted, "The goal is to reach an agreement in principle, but it is impossible to finalize the details within 90 days." After intensive negotiations this week in Washington, EU Trade Commissioner Valdis Dombrovskis only said the talks were "productive."
Berenberg Bank's Chief Economist Hogle Schmidting warned, "In tricky issues such as regulations, consumer standards, and taxes, the EU and its member states have limited room for concessions." A study by Bruegel Institute shows that if the US implements tariffs of 10%-25%, the EU's GDP will lose 0.3%, while the US itself will suffer a loss of up to 0.7%. If the tariffs rise to 50%, the consequences will be more destructive. The medical field will be hit first - the Siemens advanced CT scanners purchased by US hospitals face price increases, and revolutionary devices produced in Germany's "medical valley" may be delayed in entering the US market. A survey by the American Hospital Association found that 91% of hospital CFOs expect significant increases in medical equipment costs due to tariffs this year.
The EU's countermeasures directly target sensitive areas of the US political landscape, precisely striking the economies of "red states" through agricultural and manufacturing products. 22 billion euros worth of US exports, including soybeans, corn ethanol, whiskey, and tree nuts, face 25% retaliatory tariffs. At the same time, the EU is accelerating its shift to alternative suppliers such as Brazil - in 2024, Germany's imports of Brazilian soybeans increased by 82.3%. Simon Hunter, CEO of Campari Group, admitted he is evaluating pricing strategies for products like Skyy Vodka, while Bernard Arnault, Chairman of LVMH Group, warned that production lines might be moved to the US: "If high tariffs become a reality, we have no choice."
US Treasury Secretary Scott Bensont remains cautious about reaching a comprehensive agreement, while former US Ambassador to the EU Anthony Gardner bluntly stated, "There is no expectation for substantive content." Analysts predict the most likely outcome is both sides reaching a framework agreement in principle, maintaining a 10% base tariff, but existing tariffs on automobiles, steel, and aluminum will remain. Schmidting sharply pointed out, "Although Trump may package this result as a 'victory,' the ultimate victims of protectionism are mostly American consumers." As the 72-hour countdown begins, the trade dispute between the world's two largest economies is pushing multinational corporations and ordinary people into a new era of rising costs.
Original: https://www.toutiao.com/article/1836894162434443/
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