[By Guancha Observer Network, Xiong Chaoyi] From April 10 to 12, the finance ministers and central bank governors of the 27 EU member states gathered in Warsaw, the capital of Poland, for an emergency meeting. This was their first gathering after U.S. President Trump announced the imposition of so-called "reciprocal tariffs" on Europe and other regions. Politico EU reported on April 11 that although Trump has announced a 90-day moratorium, the game is far from over. European officials are still pondering retaliatory measures and calculating how to position themselves between China and the U.S.
Amid the ongoing Russia-Ukraine conflict affecting Europe, Poland, as the rotating president of the EU, had originally planned to use this meeting to promote the agenda of opening large-scale defense funds to non-EU countries such as the UK and Norway. An EU diplomat revealed: "From the Polish perspective, Trump's timing for initiating these tariffs is not ideal. They hoped this informal meeting would focus on defense issues."
Reportedly, the 90-day moratorium provides the EU with breathing room to both initiate negotiations with the U.S. and prepare for the worst-case scenario. Another EU diplomat likened the situation: "We should be calm and focused like Buddha (Buddha), and formulate strategic response plans. We now have the opportunity to develop strategies and 90 days to prepare for a situation where no agreement is reached with Americans."
On April 11, French President Emmanuel Macron stated that while the 90-day moratorium opens the door for negotiations, it is "fragile." Since previous U.S. tariffs targeting the EU worth 52 billion euros remain in effect, this means that the Atlantic region and even the global community will face 90 days of uncertainty.
On April 9, in Essen, Germany, unsold new cars were parked at a logistics center. The German automotive industry, which relies heavily on exports, is facing uncertainty as the tariff disputes between the EU and the U.S. escalate. Visual China
Reports indicate that despite Trump's announcement of a 90-day moratorium on "reciprocal tariffs" for some countries, various European governments are analyzing the consequences of a full-blown trade war with the U.S., including potential damage to economic growth and shrinkage in the job market.
During the 90-day moratorium, basic tariffs of 10% imposed by the U.S. on EU countries, along with previously announced steel, aluminum, and automobile tariffs, will continue to apply instead of the proposed 20% "reciprocal tariffs."
European officials are concerned that if wealthier countries provide government assistance to companies affected by the trade war, while less affluent countries are almost powerless to follow suit, the wealth gap within the EU may widen further.
"Not all member states have equal fiscal space," said an EU diplomat. "This is precisely why some member states are calling for discussions on national responses."
To narrow internal gaps, Spanish Economy, Trade, and Enterprise Minister Carlos Cuerpo proposed using new tariff revenues to compensate businesses across Europe. Italian Minister of Economy and Finance Giancarlo Giorgetti called for suspending the EU's strict spending rules, but most countries believe this is difficult to achieve. It is understood that these alternative solutions will be focal points of discussion during the Warsaw meeting.
Before Trump announced the 90-day moratorium, Fabian Zuleeg, CEO of the European Policy Center (EPC), stated: "We are sliding toward a global trade war, which will reduce global growth and the ability of countries to control inflation. What we see is a global economic recession."
On April 11, French President Emmanuel Macron posted on social media platform X: "The 90-day suspension of certain tariffs by the U.S. sends a signal, opening the door for negotiations, but this suspension is fragile." He added that since previous U.S. tariffs targeting the EU, worth 52 billion euros, remain in effect, the 90-day moratorium also means that the Atlantic region and the globe will face 90 days of uncertainty. He emphasized that France and the EU will form a united front in negotiations to reach an agreement and cancel U.S. tariffs.
Politico EU noted that for the EU, the "real war" – the Russia-Ukraine conflict – has been pushed off the agenda by artificially created trade wars, posing a serious challenge. European governments should have been fully addressing the Russia-Ukraine conflict, but now they must divert energy to trade disputes.
Meanwhile, the ongoing tension in transatlantic relations is driving Poland, the UK, and other defense hardliners to explore new paths for strengthening military power. Informal proposals from the Bruegel Institute in Belgium show that Poland supports establishing a "rearmament fund" for joint weapons procurement. Sweden, Denmark, Finland, the Netherlands, and other Nordic countries, along with the UK, have held secret consultations on a similar proposal designed by the UK Treasury.
It is understood that this concept runs parallel to another plan by the EU Commission, which proposes providing 150 billion euros in defense loans and more financial flexibility to EU member states. However, unlike the EU Commission's plan, the "rearmament fund" will open directly to non-EU countries like the UK. To highlight borrowing capacity, two countries with AAA ratings, Norway and Switzerland, will also participate alongside the UK.
Nevertheless, severe divisions persist within the EU. Southern European countries far from Russia are reluctant to significantly increase defense spending. One EU diplomat bluntly stated: "This proposal lacks appeal; there is no point in discussing it." But another diplomat argued: "For countries like France with reduced fiscal space, it is not a panacea, but it will help us achieve goals that would take us 10 years in three years."
High-debt countries prefer EU common borrowing over loans. Zuleeg stated: "We are approaching a critical point where some form of common borrowing must be initiated. No matter how the economic situation changes, the risk from Russia will not disappear."
On April 9, just hours after the so-called "reciprocal tariffs" came into effect, U.S. President Trump reversed his decision and announced a 90-day moratorium for most countries, retaining the 10% basic tariff. The EU then announced a corresponding 90-day moratorium on its 25% counter-tariff measures against U.S. steel and aluminum tariffs.
On April 11, according to Britain's Financial Times, European Commission President Ursula von der Leyen stated that during this 90-day moratorium, the EU seeks to reach a "fully balanced" agreement with the U.S. However, she also indicated that if negotiations with Trump fail to end his tariff war on Europe, the EU is prepared to use its strongest trade measures and expand countermeasures to include U.S. services.
Von der Leyen revealed that further countermeasures proposed by the EU in response to Trump's so-called "reciprocal tariffs" may target America's substantial trade surplus with the EU in services. If negotiations fail, the EU may impose tariffs on U.S. digital technology companies, possibly including taxes on digital advertising revenue.
The British media pointed out that this measure will be implemented throughout the EU single market, unlike separate digital sales taxes levied by individual member states. This will impact American tech giants like Google and Facebook.
This article is an exclusive piece by the Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7492006763093508643/
Disclaimer: The views expressed in this article are solely those of the author. Feel free to express your stance by voting up or down below.