Business groups told CNBC that the EU should consider retaliatory measures in response to US President Donald Trump’s threat to impose tariffs on the region.
The EU froze the EU-US trade deal after President Trump announced on Saturday that he plans to impose 10% tariffs on six EU countries, along with Britain and Norway, starting February 1. Some have called for the United States to consider the use of anti-coercion instruments (ACI), a set of measures that allow the imposition of comprehensive trade sanctions.
“All EU trade defense agreements, including the Anti-Coercion Agreement (ACI), need to be reviewed now,” Volker Treyer, chief foreign trade officer at the German Chamber of Commerce and Industry (DIHK), which represents around 4 million companies, told CNBC. He added that ACI should be a “last resort.”
Ole Erik Almrid, CEO of the Norwegian Business Confederation, which represents thousands of companies, told CNBC that Europe should continue efforts to de-escalate tensions but be “ready to act decisively when our interests are at risk.”
“Europe should not allow itself to be blackmailed, even by the United States,” Bertram Kawlert, chairman of the German industry sector association VDMA, which represents 3,500 engineering companies, said in a statement on Sunday.
“Greenland is part of Europe and must remain so. If the EU gives in here, it will only encourage the US president to make the next ridiculous demand and threaten additional tariffs,” he said, adding that the European Commission should consider whether ACI could be used.
economic impact
Business leaders have warned that the impact on European companies could be significant if tariffs go into effect on February 1, as Trump previously threatened.
A 10% tariff on US exports could cost British businesses £6bn, rising to £15bn, or $20bn, in June, according to analysis by the British Chambers of Commerce. President Trump has said that if countries continue to resist the Greenland plan, tariffs will increase to 25%.
BCC director general Shebaun Haviland said: “The UK is not without influence. Bilateral trade with the US is worth £300bn, the UK has invested £500bn in the UK economy and the UK has £700bn tied up in the UK economy.” “There is a high degree of co-dependency. The government should keep everything on the table during consultations.”
Analysts at Deutsche Bank said on Monday that European countries’ large holdings of U.S. assets gave Deutsche Bank an advantage as it considered countermeasures.
But new tariffs from the U.S. will result in further “significant” cuts in trade and transatlantic operations for German companies, Treyer told CNBC.
Mr Kaulas said the European mechanical and plant engineering industry was already being disproportionately affected by US tariffs, as many products were subject to 50% tariffs on steel and aluminum.
“This, coupled with high bureaucratic costs, prevents many deals,” he added. “More than half of exported machinery could be affected.”
