European leaders have condemned US President Donald Trump’s sweeping new tariffs as a blow to global trade, with the EU preparing countermeasures amid investor panic and stark economic warnings from across the bloc.
European stocks fell sharply on Thursday following the announcement of a 20% tariff on all goods imported from the European Union and 25% on cars. The Stoxx 600 closed down 2.7%, with Germany’s DAX falling 3%, France’s CAC 40 down 3.3%, and the UK’s FTSE 100 losing 1.6%. The Stoxx autos index dropped 3.9%, while tech stocks fell 4.5% and banks shed 5.6%.
Retailers with exposure to US markets were among the hardest hit. Shares in Adidas dropped 10%, Pandora fell 11%, and Puma lost 11%. The impact rippled beyond Europe’s borders, with factory-heavy Southeast Asian economies—key parts of European supply chains—facing eye-watering new tariffs: 49% on Cambodia, 48% on Laos, 46% on Vietnam, 36% on Thailand, and 32% on Indonesia.
The European Commission has estimated that €380bn of EU exports—around 70% of total exports to the US—are now subject to tariffs, with an €80bn increase in duties.
“The global economy will massively suffer. Uncertainty will spiral and trigger the rise of further protectionism,” said European Commission President Ursula von der Leyen, who called the tariffs “a major blow to the world economy”.
She confirmed the EU is preparing additional retaliatory measures, building on an initial €26bn package responding to earlier US steel and aluminium tariffs. Further steps could include targeting American digital services, banks, and public procurement contracts—options enabled by the EU’s Anti-Coercion Instrument.
France’s President Emmanuel Macron described the tariffs as “brutal and unfounded” and suggested suspending new French investments in the US. He warned: “Nothing is excluded. All the elements are on the table.” Macron also hinted at measures against US tech companies, “where the United States benefits enormously from Europe”.
Spanish Prime Minister Pedro Sánchez accused Trump of triggering an “unfair and unjustified crisis” and announced a €14.1bn “response and commercial relaunch plan”. Spain’s Chamber of Commerce projects a €4.3bn loss from the tariffs in 2024, with the agri-food and manufacturing sectors particularly exposed.
Germany, Europe’s largest economy and the US’s biggest EU trading partner, is also expected to suffer significantly. German exports to the US totalled €252.8bn in 2024. Outgoing Chancellor Olaf Scholz called the tariffs “fundamentally wrong” and an “attack on the trade system that has created prosperity all round the world”.
Acting Economy Minister Robert Habeck urged European unity and warned that appeasement would not succeed. “Trump will buckle under pressure… but he needs to feel the pressure,” he said, calling for strategic investment in European independence, especially in AI, cloud services, and space.
Irish Tánaiste Simon Harris said the tariffs “could have a significant effect on Irish investment and the wider economy,” while Poland warned of a potential 0.4% GDP hit. Slovakia may see output fall by at least 2.5% over two years.
European businesses, from multinationals to small family-run exporters, are reporting immediate impacts. German shipping firm Maersk, seen as a proxy for global trade, fell 9.5%. French olive oil producers and Italian wineries say orders have stopped while clients await clarity. “We’ve halted exports for almost two weeks now,” said Stefano Leone of Tuscany-based Marchesi Antinori.
Despite the damage, the EU has left the door open to negotiation. Trade Commissioner Maroš Šefcovic will meet US officials Friday. “We’ll act in a calm, carefully phased, unified way,” he said. But he warned: “We won’t stand idly by.”
While the EU pushes for talks, some US officials have cautioned against retaliation. Treasury Secretary Scott Bessent told Fox News, “If you retaliate, there will be escalation.”
The Trump administration insists its actions are justified by trade imbalances. Trump claimed the EU charges a 39% tariff on US goods—an assertion widely rejected by economists. The actual average EU tariff is estimated between 1% and 4.8%, depending on methodology. Trump’s “reciprocal tariff” calculations are instead based on trade deficits, not actual duties, drawing criticism from European and WTO officials.
“The formula used is logical only in the head of President Trump,” said Sciences Po economist Thierry Mayer. “It is not a measure of tariff level… it’s the obsession with the trade deficit.”
The political fallout has been sharpest for Europe’s far-right leaders, many of whom have aligned themselves with Trump ideologically. Spain’s Vox leader Santiago Abascal said he opposed the tariffs but defended Trump’s right to “defend his interests”. Hungary’s Foreign Minister blamed the EU for failing to cut auto tariffs and accused Brussels of “Trump-phobia”.
Meanwhile, EU officials are considering whether to trigger the Anti-Coercion Instrument for the first time, which could enable restrictions on US banks, tech firms, and intellectual property rights.