As global trade tensions escalate, former U.S. President Donald Trump has unveiled an unprecedented wave of new tariffs, with a particular focus on Asian economies. The most affected nations include China, Vietnam, and Taiwan, with import taxes soaring to 34%, 46%, and 32%, respectively—on top of existing tariffs. For Thailand, the economic blow is significant, estimated at around 1% of its GDP.
Trump’s renewed protectionist drive also targets Europe. In a characteristically blunt statement, he criticized the European Union:
“The EU… they’re very tough. Very nice, but they let us down. It’s so sad to watch. Pathetic.”
The EU now faces an additional 20% tariff on exports to the U.S., double the rate imposed on the post-Brexit United Kingdom, which Trump has labeled as a major Brexit “dividend.” While the UK has taken a more conciliatory approach, even lowering its digital services tax to entice a trade deal, the EU finds itself in a precarious position—balancing economic interests, regulatory sovereignty, and geopolitical tensions.
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Even before Trump’s announcement, free trade was under increasing strain. According to The Wall Street Journal, countries around the world have been imposing trade barriers at a pace unseen in decades. South Korea and Vietnam recently levied punitive tariffs on Chinese steel; Mexico initiated anti-dumping investigations on chemicals and plastics from China; and Indonesia is preparing new levies on imported packaging nylon. Even Russia, a close ally of China, is moving to restrict the flood of Chinese electric vehicles.
Many observers are drawing historical parallels with the 1930s. The infamous Smoot-Hawley Tariff Act, widely blamed for deepening the Great Depression, is being compared to today’s trade war risks. Trump’s tariffs are said to be even more severe than those from that era.
Trump defends his policy under the principle of “reciprocity,” arguing that trade partners impose far higher tariffs on American goods. While there is some truth to that—Europe notably imposes higher duties on agricultural products and cars—the way Trump calculates trade deficits has raised eyebrows. Financial columnist James Surowiecki criticized the methodology as “extraordinary absurdity,” noting that the administration simply divided the trade deficit by the value of imports, ignoring more nuanced economic indicators. Even Switzerland, known for its diplomatic tone, called the calculation “incomprehensible.”
So far, neither Switzerland nor the EU has retaliated. However, leaked documents suggest the EU is considering a range of responses—including drastic measures like suspending intellectual property protections, which would allow free distribution of U.S. content such as Netflix series.
The EU could also take a more pragmatic approach by scrapping protectionist policies of its own—such as the Carbon Border Adjustment Mechanism (CBAM), which taxes imports from countries with laxer climate policies. CBAM not only raises consumer costs but also adds layers of bureaucracy. Critics argue that its removal could be a goodwill gesture toward de-escalation.
Additional EU rules, like the due diligence regulation on supply chains and the deforestation directive, have drawn international criticism. Countries like Malaysia argue these rules are unfair and overly burdensome, despite national efforts to improve sustainability standards.
In the U.S., backlash against European regulations is growing. American paper industries and Republican lawmakers have urged Trump to push back. Commerce Secretary Howard Lutnick has even threatened trade tools in retaliation against EU climate rules.
As Trump’s policies revive global protectionist trends, the EU faces a critical choice: escalate or de-escalate. Ironically, Trump’s aggression might offer the EU a chance to rethink its own trade barriers and lead a more open, cooperative trade agenda.
This article is originally published on fr.businessam.be
