US Tariffs Could Threaten Up to 300,000 EU Jobs

1. 1.2 Million German Jobs Depend on US Exports
2. Europe and the US Engaged in Tariff Wars During Trump’s First Term
3. Uncertainty Over Whether the 27 EU Member States Can Speak With One Voice

US President Donald Trump’s announced tariff measures against the European Union (EU) could result in the loss of up to 300,000 jobs in Europe if realized. Considering President Trump’s negotiation style of threatening counterparts to get what he wants, the EU tariff announcement may remain just a threat. However, unlike Mexico and Canada, the EU is a collective of multiple countries, making it uncertain whether negotiations with the US will proceed swiftly.

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The US is the largest export market for Europe. According to Eurostat, the EU’s statistical office, the US accounted for 20% of EU exports in 2023. At that time, Europe ran a trade surplus of approximately $160 billion (233.456 trillion KRW) against the US. Therefore, the more intense the trade disputes with the US become, the more inevitable the economic damage. Swiss economic research institute Prognos estimated that 1.2 million jobs in Germany depend on exports to the US, and if tariffs on Europe are implemented, up to 300,000 jobs could be at risk.

The luxury goods market in Europe is also on high alert over the possibility of a tariff war between the US and the EU, reported The New York Times on the 3rd (local time). In 2019, the US imposed 25% tariffs on French wine, Italian cheese, and luxury brand handbags such as Louis Vuitton and Gucci. This is why Bernard Arnault, chairman of the largest luxury group Louis Vuitton Mo?t Hennessy (LVMH), attended President Trump’s inauguration and praised him, saying he felt an optimistic atmosphere in the US. Arnault’s actions are interpreted as preparations for potential aftershocks of trade conflicts between Europe and the US.

Trade disputes between the US and the EU are not new. During President Trump’s first term, the two continents engaged in a tariff war over steel and aluminum, long-standing trade conflict issues. In March 2018, citing national security threats, President Trump applied Section 232 of the Trade Expansion Act to impose 25% and 10% tariffs on imported steel and aluminum, respectively. In response, the EU retaliated by imposing 10% tariffs on US products such as Levi’s jeans, bourbon whiskey, and Harley-Davidson motorcycles. The tariff dispute, which lasted over three years, was finally resolved through an agreement between the two sides in October 2021.

There is also speculation that the tariff threat against the EU may be political “showing.” President Trump has often used tariffs to intimidate counterparts and then secure what he wants. A representative example is when he announced 25% tariffs on Mexico and Canada but postponed implementation just one day before it was to take effect on the 3rd.

However, it is uncertain whether President Trump can speak with one voice when negotiating with the EU. Unlike Mexico and Canada, which are single countries, the EU is a collective of 27 countries. This means that the interests of each country regarding Trump’s tariff measures may differ.

On the 3rd (local time), at an informal EU summit, European leaders showed subtle differences in stance when the US was identified as the next target for tariffs. French President Emmanuel Macron and Danish Prime Minister Mette Frederiksen called for a firm joint response to the US’s strong tariffs. President Macron had previously clashed with President Trump in 2019 over digital and wine tariffs. Prime Minister Frederiksen harbors negative feelings toward Trump over the Greenland US acquisition issue. On the other hand, German Chancellor Olaf Scholz expressed that while the EU could respond with its own tariffs, cooperation is more important, and a compromise must be found. Given Germany’s high dependence on the automotive industry, there are concerns that a Trump-driven upheaval in the car market could shock the German economy, forcing Germany to tread carefully around Trump.

This content was produced with the assistance of AI translation services.