There have already been tariffs on European steel and aluminum — which led the bloc to impose duties of 25% on $2.8 billion of U.S. products in June 2018, and, there’s an ongoing dispute regarding Airbus and Boeing — but experts believe a wider spat with Europe would be much more damaging than the current tit-for-tat with China. Leaders of the G-7, the world’s seven largest economies, are due to talk global trade at a meeting in France later this week.
Data from the Office of the U.S. Trade Representative shows that in 2018, the U.S. imported $683.9 billion of EU goods and $557.9 billion from China. However, looking at U.S. exports, these reached $574.5 billion to Europe and only $179.2 billion to China. These figures included both goods and services.
Furthermore, both the U.S. and Europe cannot afford a trade war at this stage. “While the U.S.-China trade war is now starting to have effects on the broader health of the economy, it has taken a while and some of the effects were balanced by a benign economic climate,” Fredrik Erixon, director of the think tank ECIPE, told CNBC.