The global trade landscape is shifting fast. With the United States slapping a 20% tariff on European products under Donald Trump’s policy, Europe is bracing for serious consequences.
The new tariff is already creating anxiety across industries like electronics and mechanical engineering.
But that's not all. The move could set off a chain reaction that might hit Europe even harder, writes Ziare.
One of the biggest worries is China. With its products now facing higher costs in the US, Chinese exporters are expected to look elsewhere.
Europe, with its large market and fewer trade restrictions, is an obvious target. This shift could bring in waves of cheap goods, making it harder for European businesses to compete.
Brussels is not sitting still. Officials from the European Commission say they are ready to take action.
They are keeping a close eye on Chinese import numbers. Some say they may impose their own tariffs if needed.
Robin Winkler, chief economist at Deutsche Bank, warned that a sudden flood of Chinese goods could shake up Europe’s economy in a big way.
Chinese exporters are known to lower prices aggressively when faced with trade barriers.
Europe has already seen signs of this in the electric car market. The EU had to impose tariffs of up to 35% on Chinese electric vehicles. Now, other products might follow.
There are also fears that this situation could stir up more tension between Europe and China.
Some European diplomats believe China won’t slow down its export-driven strategy. That could put even more pressure on local companies and European trade policies.
If prices drop sharply because of cheap imports, inflation might fall too. That could force the European Central Bank to lower interest rates sooner than planned.
Back in 2018, Europe responded to Trump-era steel tariffs by putting up barriers of its own.
Officials say they are ready to do it again. If necessary, they will move to protect local industries.
Estimates show China could lose up to $510 billion from losing access to the US market.
That could lead to even more Chinese goods heading toward Europe, creating long-term challenges for global trade.
