Paul Kirby and Laura Gotzi
BBC News
European Commission/dati bendo/Distributed materials
European Commission President Ursula von der Reyen has already laid out the first measures
While European leaders were preparing for a “Trump trade war,” the reality of a 20% full US tariff was still a shock.
“This decision is a disaster in the economic world,” said French Prime Minister François Bailloux.
“The outcome will be disastrous for millions of people around the world,” said EU committee chief Ursula von der Reyen.
The EU message is that while it has the task of dealing with 27 member states, Europe is ready to negotiate with the US and is ready to fight back.
Europe “calibrates” its response
EU Trade Commissioner Maros Sefcovic aims to speak to his US counterpart on Friday about tariffs.
“We act in a gentle, careful, step-by-step, unified way, while adjusting our responses, with ample time for consultation,” he said.
In all European countries, President Donald Trump’s tariffs have been a serious blow, with the central government trying to ease the fears of industry and commerce.
Italy’s Giorgia Meloni seemed more reluctant than others until Wednesday, but kindly retaliation against the United States cleared up her journal and quickly summoned the minister and business leader to an emergency summit.
Italy exports 1.6 billion euros (£1.355 billion) worth of agrifood products and 2 billion euros worth of wine to the US, Alessandro Apolitto, the country’s leading farmer organization, told the BBC.
Aside from economic losses, he says there is a risk that US consumers will rely on imitation.
In Spain, Prime Minister Pedro Sanchez rejected Trump’s claim that the EU is leviing 39% tariffs on US goods, claiming it was actually only 3%.
“It’s just an excuse to punish the country and implement fertility protectionism. A trade war affects everyone, but more than anything, it hits the things that impose it,” he warned.
European business holds breath
The Spanish Chamber of Commerce fears a 14% reduction in exports to the US, particularly in mechanical and electrical equipment. Sánchez has announced a 14.1 billion euro response plan to support business with finance and seek new markets outside the US.
Slovakia is more exposed than most EU countries due to its heavily dependent on industrial exports, with some economists warning of a deep decline in economic output of at least 2.5% in just two years.
Polish Prime Minister Donald Tass warned that economic output could fall by 0.4% this year.
Even before Trump’s announcement, the French government had revised its forecast growth this year to 0.7%.
The French wine and spirits sector in particular could be attacked. Head of Jerome Bauer, one of the leading wine organizations, has warned the French wine industry of a net loss of 1 billion euros (£835 million).
Italian winemakers are holding their breath too.
“We have stopped exports for nearly two weeks now. Our clients have not placed orders and importers have not imported them, so everything is paralyzed,” says Stefano Leone of Marchesi Antinori, a Tuscany winery with over six centuries of history.
The US accounts for 12-13% of total sales, and Leone says the company is in range.
“We are waiting to understand what decisions the European Union will make in response to relying on measures that may be adopted in response to the US. We hope that some form of negotiation will take place and lead to concrete outcomes.”
Feelings across the European market were gross as investors sold stocks considered to be the most vulnerable to Trump’s tariffs. Adidas, one of the biggest German companies, saw that 12% of its value had been wiped out from the stock market.
Not only large companies are attacked, but large companies too.
Rocco Mangiaracina
Rocco Mangiaracina says US tariffs will hit his family business directly
“This was the first year we started exporting to the US, and tariffs have a more direct impact on us,” says Rocco Mangiaracina, who runs a small family business in Sicily that produces 20,000 bottles of olive oil per year.
“Just a week ago, I sent my first 900 bottles to the American market.”
“We are ready for this trade war,” said Sophie Plymouth, a spokeswoman for the French government. [European] The union must be strong, and it must unite for this.”
Germany, Europe’s largest economy, quickly called out “an unprecedented attack on the international trade system, free trade and global supply chains.”
However, it was up to Prime Minister Olaf Scholz’s performance to point out that “the world’s strongest internal market with 450 million consumers” gave Europe power, as Germany is still waiting for Friedrich Merz, who is on standby, to form a government.
So how will the EU respond and can it continue to unite?
Two-step retribution
Already laying out the measured response.
Starting in mid-April, the first package of EU tariffs worth up to 26 billion euros will be slapped on US goods. This retaliates US tariffs of 25% on EU steel and aluminum exports announced in March. These were returned to give space for the negotiated solution. As they move on, they cover a wide range of agriculture, food and textiles.
There is currently discussion on an even bigger package of measures scheduled to begin the end of April.
In the words of von der Leyen, Europe “holds a lot of cards.” Further measures include not only US products but digital services.
According to Brussels, Trump has complained about the US trade deficit with the EU, but the US has a trade surplus of 100 billion euros with the EU.
If the EU decides to impose tariffs or restrictions on major technical services or restrict access to public U.S. contracts, some may use what they label as “big bazooka.”
It requires the majority support from EU countries, but when European companies are under threat, it is a powerful weapon.
Peter Digen, head of geopolitics at the Danish Industry Commission, told the BBC that Trump “threw hand-to-hand bullets on world trade, creating great uncertainty.”
He said that US tariffs will hit the smallest companies exported to the US the most violently. The EU had to respond proportionally, but he said negotiations must continue to avoid a deeper trade war.
While most European leaders quickly condemned US tariffs, Hungarian Foreign Minister Peter Syjart put the blame straight at the foot of the EU. Hungarian leader Victor Orban is widely viewed as Trump’s biggest ally in Europe.
“In Brussels, it has once again been proven that incompetent people are leading European institutions struggling with the very serious Trump fears,” Schijalt said.
Norway is not an EU member state, but Prime Minister Jonas Gaal said the US decision to impose a 15% tariff was “bad news” affecting many Norwegian businesses and jobs.
Norway is primarily an exporter and finance minister Jens Stoltenberg fears it could be hit by a “triple squeeze.” Not only is Trump’s tariffs and a decline in growth rate, but EU measures too.
It could be a trade war with many casualties.
Additional reporting by Rome’s Julia Tonmasi.
