Mark Leonard's World in 30 Minutes Tariff tensions: Avoiding an EU-US trade war
Jul 14, 2025
Tobias Gehrke, an ECFR senior policy fellow specializing in trade policy and EU-US relations, joins to discuss the fallout from a sudden threat of tariffs from the U.S. He examines the EU's potential €93 billion retaliation package and the pressing need for political engagement to navigate these tensions. The conversation delves into how the Ukraine crisis complicates trade discussions and highlights the importance of Europe's Anti-Coercion Instrument in responding to external pressures. Ultimately, can Europe leverage its economic power to prevent a trade war?
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Trump's Vague Pressure Tactic
- Trump's letter was vague, increasing pressure without specifics, baffling EU negotiators.
- The EU prepared a €93 billion retaliation package but hesitated to trigger the broad anti-coercion instrument.
Shift To Political Negotiations
- Europeans should shift from technical negotiations to political engagement involving top leaders.
- Sending Commission President von der Leyen and key leaders to Washington might break deadlocks.
Security Limits Trade Retaliation
- Security priorities like Ukraine complicate EU-US trade tensions and limit aggressive EU pushback.
- The EU fears US economic escalation but adding tariffs beyond 30% has diminishing negative trade impact.