Donald Trump has threatened European Union sanctions-tariffs three times in 20 days since taking office. The most resounding, for many and perhaps not unfairly, was the one from World Economic Forum in Davos where Trump just a few hours in the White House said clearly that under his administration the US will not continue to accept the “unacceptable practice of the union not buying enough American cars, agricultural products and LNG.”

Trump is right…

The trade balance between the US and the 27-nation bloc is significantly negative for Washington. According to Eurostat, the Union sells and the US buys a total of $161.6 billion more in goods and services. The US trade deficit data troubles Trump who is clearly oriented towards the sharp rise of his country economically both at home and abroad. Trump knows better than anyone in his inner circle that a reduction in the trade deficit automatically increases US profits, and many times over. But knowing all this, the threat of tariffs alone reduces the chances of success for his own project. Trump who has frozen tariffs on Canada and Mexico and has yet to respond to the Chinese tariffs that Beijing imposed in response to the new countermeasures from the oval office has not openly positioned himself on what he is considering putting under the US “whip”. What is not simple even for him is the fact that if the European Union is dealt with as a whole it is by default – despite the trade deficit – the biggest buyer of American goods. Trump also knows well from his first term that it is not easy to “fragment” Europe even if “our” problems are also big.

Europe declaring itself prepared and the great danger

The European Union says it has a plan – a response to Trump’s moves but this is a given as in the past the 27 have almost never moved in concert to solve a major problem. One does not have to look very hard to see the attitude of 27 member countries to the war raging in the east of our “neighbourhood” to see that for some, even assistance to Ukraine is not common ground. In any case, based on what has been leaked by the Commission, it seems that many different scenarios have indeed been discussed today in case the US takes the step of targeting the Union. The common thread in all scenarios is that the Union does not wish to open an economic or trade war with the other side of the Atlantic because, as Brussels sources stress, this would be ‘suicidal for both’.

Europe has in its hands three or, for others, a little more “weapons” for the use of which there is no provision or decision simply because the American President has not opened his cards on the subject. The fact that even today Donald Trump has not spoken with Ursula von der Leyen is for many interpreted as a bad omen” as bad omen is that the new US Secretary of State, Rubio, last week reportedly refused to speak with the foreign ministers of the member states of the Union. Given the way the Trump Administration has so far moved on foreign policy issues, we should expect a strong message coupled with a corresponding announcement of tariffs.

If the Union chooses to respond the way Canada has done given there will be complications as especially today after the partial “decoupling” from Russian energy there is an inverse “dependence” on US gas. Trump may have stated that “agreements are meant to be kept” in response to a question about whether he will turn energy into a weapon for Washington but at the pace things are “running” no one can “sleep easy”.