Why Donald Trump lashed out at Europe over trade

The US president’s economic team has been frustrated by what it says is the slow pace of talks.

Stocks dropped Friday on fresh trade tensions. Picture: Timothy A. Clary/AFP/Getty Images

US President Donald Trump’s surprise tariff threat against the European Union came in the midst of deepening frustration on his economic team over the 27-nation bloc’s approach to taxes, regulations and China.

Trump’s advisers have privately expressed irritation to European officials that EU member nations’ differing trade priorities have slowed down the talks, according to people familiar with the discussions.

They have complained about what they see as Europe’s cautious approach to the negotiations and what they call the EU’s reluctance to make concrete offers that address US concerns, such as fees on streaming services, value-added taxes, automotive regulations and fines imposed against US companies in antitrust cases, the people said.

The US has so far not secured a commitment from EU leaders to place new tariffs on Chinese industries, a priority for Trump administration officials who are pushing to ratchet up trade pressure on Beijing, the people said.

As part of separate trade negotiations with the US, the UK agreed to move toward imposing tariffs on Chinese steel, the people said.

That helped seal the US-UK trade deal that Trump announced this month. EU officials have indicated a willingness to address non-market economies such as China’s, according to people familiar with the bloc’s approach.

The US-EU tensions boiled over Friday morning, when Trump threatened to impose 50 per cent tariffs on European imports starting June 1.

In the Oval Office on Friday afternoon, Trump signalled that he plans to follow through – at least for now – on his threat, saying he is “not looking for a deal” with the EU.

The president has for years expressed outrage at Europe both in public and in private, often berating the continent’s leaders more pointedly than he does some American adversaries.

Starting in his first term, Trump criticised North Atlantic Treaty Organisation member countries for not spending enough money on defence, a charge he has repeated for years. This month he said that the EU is “nastier than China.”

He has referred to the bloc’s antitrust fines as taxes on US companies. In February, he said the EU “was formed in order to screw the United States.”

Trump’s blunt negotiating tactics stand in contrast to the more staid and process-oriented approach of EU leaders, which includes frequent consultations with member countries.

Trump’s Friday morning threat, issued in a social-media post, came as a surprise to EU officials and diplomats, who had expressed optimism in recent days that trade discussions had begun to pick up after a slow start.

The EU and US exchanged documents recently that described possible points of discussion in trade talks, a step some European diplomats viewed as a positive development, and the bloc has privately indicated that it is ready to co-operate with the US to address China’s state subsidies for key industries, said a person briefed on the talks.

EU trade chief Maros Sefcovic, spoke on a call with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick hours after Trump’s Truth Social post.

After Friday’s call, Sefcovic said the EU is fully engaged in trade talks with the US, but is ready to defend its interests. Trade between the two sides is unmatched, Sefcovic wrote in a social-media post, but “must be guided by mutual respect, not threats.”

An EU official said Friday that China hasn’t been a major sticking point in talks between the two sides.

Marine One, with President Trump on board, leaving the South Lawn of the White House this week. Picture: Samuel Corum/Press Pool

EU officials have sought to find a middle ground in responding to the US that is less aggressive than China’s trade retaliation, but more assertive than the UK.

The UK reached a deal with the US this month that kept in place Trump’s 10 per cent across-the-board tariffs on UK goods. Several EU ministers said recently that they wouldn’t be satisfied with a trade deal that maintained the 10per cent tariffs.

The China-related discussions are part of a US strategy to push trading partners to penalise the world’s second-largest economy through negotiations over Trump’s so-called reciprocal tariffs, which were imposed in early April before being suspended for 90 days to allow for talks.

The US strategy seeks to limit China’s involvement in other economies – particularly in strategic industries such as steel – as well as pushing other nations to apply tariffs to China’s goods to counter state subsidies provided by Beijing that make its products more competitive worldwide.

The US has made similar China-related “economic security” requests with other key trading partners such as Japan and South Korea, people with knowledge of the discussions said, though no commitments have yet been made public.

China remains an important market for EU exports, and European leaders are reluctant to launch a high-profile trade war with Beijing.

The EU and the Trump administration have fundamentally different approaches to trade talks. Trump has been eager to announce deals quickly.

The European Commission, the bloc’s executive body, is in charge of trade policy, but communicates regularly with its 27 member states to ensure they are on board with its approach. That process means the EU often moves slowly – a central source of frustration for the Trump administration.

Treasury Secretary Scott Bessent raised concerns about the pace of trade talks to EU officials during a meeting of finance ministers in Canada this past week, according to a US official.

The bloc has so far held the line against some of Trump’s demands. Officials have said they don’t plan to change the bloc’s value-added tax, which the Trump administration has criticised and which the EU and many economies view as non-discriminatory. It also won’t change health and digital regulations, officials have said.

An EU diplomat said Friday that it was difficult to know from Trump’s post whether the president actually intends to follow through on his tariff threat. “You can’t base policy off a Truth Social post,” the diplomat said.

In a Fox News interview Friday, Bessent said he hoped the threat of 50 per cent tariffs would “light a fire under the EU.”

The EU’s trade chief travelled to Washington in April armed with proposals to cut both sides’ industrial tariffs and for the EU to buy more American energy and soybeans, but left empty-handed.

“The EU is doing its part,” a spokesman said after that meeting. “Now, it is necessary for the US to define its position.”

he US recently sent a document to the EU outlining several areas the US wants concessions on, including non-tariff barriers as well as economic security, a term that is often used to refer to concern about China’s economic dominance. The EU’s response, which covered several trade issues, included an indication that the bloc was prepared to co-operate on China, people briefed on the matter said.

The EU previously approved tariffs for €21 billion ($36.8bn) of US imports, equivalent to around $US24 billion, but put those duties on hold after the Trump administration announced its 90-day pause on some US tariffs.

It also proposed targeting a second set of goods, worth up to €95 billion ($166bn), if negotiations with the US break down.

Dow Jones Newswires