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Jun 2, 2025  |  
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Patricia Cohen


NextImg:Trump’s E.U. Tariff Threat Could Cause Economic Damage Beyond Europe

Is it a negotiating tactic, a credible threat or a howl of rage?

President Trump’s threat to impose a 50 percent tariff on all goods coming into the United States from the European Union starting next weekend was the latest zag after several zigs on trade policy that have befuddled financial markets, businesses and political leaders around the world.

“No one was expecting this,” said Agathe Demarais, a senior policy fellow at the European Council on Foreign Relations. “We essentially don’t have a clue as to what it means.”

Whatever the strategy — or lack of one — the economic fallout on the American, European and global economies will be severe if Mr. Trump follows through.

Carsten Brzeski, chief eurozone economist at ING, a Dutch bank, warned that such tariff levels could lead to a dreaded combination of higher inflation and slower growth in the United States. Europe could be pushed into a recession, and global growth would fall.

At the Kiel Institute for the World Economy, Julian Hinz, a trade researcher, calculated that U.S. economic growth would drop 1.5 percent.

The magnitude of this latest tariff jolt is significantly higher than the 20 percent “reciprocal” tariff that Mr. Trump announced for the European Union in April and later paused. (That figure would have been added on top of an across-the-board tariff of 10 percent.)


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