Trump's ultimatum free trade between the United States and the European Union

The Hidden Issue: The European Automotive Industry Under Threat

The hardest-hit sector: the European automotive industry at the forefront. Volkswagen, Stellantis, Renault, and BMW all fear the increase in the tax, which could reach 27.5% or even 30%. Europe exports more than 1.3 million vehicles to the United States annually. Since April, the American market has been in decline: consumers are put off by the prospect of price increases, distributors are cutting orders, and subcontractors are on the verge of collapse. Executives are sounding the alarm: this tariff shock could cut the sector's revenue by 10 to 15% in 2025. European unions warn: at least 35,000 jobs are directly threatened in the short term, with hundreds of thousands at stake in the medium term. Manufacturers' strategy: circumvent or endure? Faced with the implacable situation, some groups are considering urgently transferring part of their production to the United States or Mexico to circumvent the tax. The problem: administrative delays, colossal investments, and uncertainty about the sustainability of American decisions.

Manufacturers are holding crisis meetings in Brussels, Paris, and Munich: should we prioritize "Made in USA" or risk stagnation? Spare parts suppliers are already experiencing the first slowdowns; the domino effect could accelerate. The American market: a sacrificed El Dorado? For manufacturers, the temptation is great to redirect their sales to Asia, where growth is more predictable, or to accelerate the transition to electric vehicles to meet the expectations of the European domestic market. But the United States still represents 20% of the global European auto market. In the event of a lasting shutdown, the industry's center of gravity will shift to China, with all the associated geopolitical risks.

Towards an all-out trade war: Europe in shock

The failure of "zero-zero," from dream to nightmare. One of the main thrusts of the European strategy was to reach a "zero-for-zero" agreement: the simultaneous elimination of tariffs on industrial and agricultural products on both sides. However, nothing is working: Washington is sticking to its 15% threshold, believing that any reduction would be perceived as weakness against China or other Asian competitors. For the first time since the creation of the WTO, the European Commission has admitted to studying a series of radical countermeasures, something never before seen. The reflex response: cascading threats. The European Union is not without arguments: already on the table is a list of more than €93 billion of American products likely to be subject to retaliatory taxes. Beef, whiskey, digital products, aircraft engines—strategic sectors carefully selected to hurt the American economy.The goal? To force the White House to back down before the deadline. But history shows that tariff escalation rarely leaves two winners. Exporters in a state of emergency. In France, Germany, and Italy, exporter associations are already recording the first damage. Frozen order blocks, contract terminations, accelerated relocations to Asia. For many SMEs, anxiety is rising: production costs are exploding, margins are melting like snow in the sun. The first job protection plans are coming out of the drawers. The shadow of deindustrialization, erased in recent years, is resurfacing.

The Hidden Issue: The European Automotive Industry Under Threat

The hardest-hit sector: the European automotive industry at the forefront. Volkswagen, Stellantis, Renault, and BMW all fear the increase in the tax, which could reach 27.5% or even 30%. Europe exports more than 1.3 million vehicles to the United States annually. Since April, the American market has been in decline: consumers are put off by the prospect of price increases, distributors are cutting orders, and subcontractors are on the verge of collapse. Executives are sounding the alarm: this tariff shock could cut the sector's revenue by 10 to 15% in 2025. European unions warn: at least 35,000 jobs are directly threatened in the short term, with hundreds of thousands at stake in the medium term. Manufacturers' strategy: circumvent or endure? Faced with the implacable situation, some groups are considering urgently transferring part of their production to the United States or Mexico to circumvent the tax.

 Problem:Administrative delays, colossal investments, uncertainty about the sustainability of American decisions. Manufacturers are multiplying crisis meetings in Brussels, Paris, and Munich: should they prioritize "Made in USA" or risk stagnation? Spare parts suppliers are already experiencing the first slowdowns; the domino effect could accelerate. The American market: a sacrificed El Dorado? For manufacturers, the temptation is great to redirect their sales to Asia, where growth is more predictable, or to accelerate the transition to electric vehicles to meet the expectations of the European domestic market. But the United States still represents 20% of the global European auto market. In the event of a lasting closure, the industry's center of gravity will shift to China, with all the associated geopolitical risks.

Agricultural and agri-food sectors on alert

Iconic products soon to be overpriced. Wine, cheese, olive oil, biscuits, cured ham: the list of European products whose prices are likely to soar is long. The United States accounts for 18% of French agri-food exports, 22% of Italian exports, and 30% of Spanish sales. The wine industry, already shaken by COVID-19 and Brexit, fears a 40% drop in its sales on American soil. For large groups, the search for alternative markets only marginally compensates for the shortfall. Small producers lack a strategy. For family-run SMEs, there's no plan B: exports to the United States sometimes account for up to half of their turnover. Higher customs duties would mean a complete halt to orders, unsold items, and the risk of accelerated bankruptcy as soon as the fall. The European Wine and Spirits Association is calling on the EU to take "swift and proportionate corrective action." But politics is bogged down:Who to protect first, how to compensate, who will pay the bill? Dangers on sensitive products: medicines and technologies .

The pharmaceutical sector is trying to convince the Trump administration not to include certain equipment and active ingredients in the list of overtaxed products. Several vital medicines are the subject of bitter discussions. European manufacturers of green technologies, medical equipment, and digital solutions also fear being targeted. There is even talk of exceptional exemptions for these products: but nothing is guaranteed, as the slightest flaw in the negotiations could turn the market into a turbulent zone.

The policy of everyone against everyone: exacerbated rivalries in Europe

Member states divided on the response. Paris favors firmness, Berlin fears industrial destruction, and Rome seeks to protect its agricultural sectors. Brussels is struggling to find a common voice. Compromise seems impossible: toughen the response, yes, but without jeopardizing entire sectors. The specter of European division resurfaces, with each capital advocating its own priorities. Discordant voices weaken the capacity for negotiation: this is an unexpected gift to Washington. Diplomacy attrition: the impression of an impossible one-on-one. Faced with Trump, every attempt at mediation runs up against the doctrine of the balance of power. The EU is divided between advocates of dialogue and those who favor public harangues. France is moving closer to Spain to negotiate sectoral alliances, Germany is seeking support from the United Kingdom, but London is sticking to its own strategy, already being assimilated by the American model.

Ultimately, the division benefits Trump, who is playing the European Union against itself. The risk of contagion to other conflict zones. If the European Union gives in, Russia, China, or India could adopt the same method, in turn imposing strict conditions on Western markets. The dream of global trade based on stable and fair rules is shattered. Multinationals are reassessing their exposure, rethinking their supply chains, and asking themselves: what's the point of betting on a divided and overtaxed Europe?

Trump Faces Global Criticism: Self-Proclaimed Isolationism

An Offensive Logic Declared in the Eyes of the World. Trump adopts a stance that runs counter to the entire transatlantic tradition. He proclaims "America First" down to the smallest detail, justifying the increase in customs duties by rebalancing a trade he considers inherently unfavorable. His advisers insist: no ally can benefit from preferential treatment, except Canada and Mexico, already subject to their own agreements. The underlying message: Europe is no longer part of the inner circle of American strategic partners. The organized response of international institutions. The World Trade Organization is stepping up to the plate, denounces the risk of fragmentation of the global economy. Judgments are multiplying, but Washington is multiplying quibbles to justify a policy deemed "in accordance with the national interest." International financial organizations—the IMF and the World Bank—are urging both parties to end the standoff, without success so far. Broken mirror of globalization 

The symbolism is powerful: at a time when global cooperation should have reached its peak, the logic of every man for himself is prevailing. Observers of the international scene note that Trump, with this decision, is tipping the ideological balance: what was the ideal of globalization is collapsing in the face of the surge of brutal bilateralism. The shock has not finished producing waves of aftershocks, from the Americas to the confines of Asia.

The American Challenge: Measuring the Cost of Retreat

American industry: winner or hostage? Trump promises that these new taxes will finance tax cuts and boost industrial employment. But American manufacturers are worried about an inevitable loss of competitiveness. Upstream, a majority of components used in American factories come from Europe. The result: rising costs, imported inflation, and the decline of certain sectors (aerospace, pharmaceuticals, luxury goods made in the USA). However, the president turns a deaf ear, convinced he can compensate with a policy of substitution and accelerated reshoring. The American consumer faces rising prices. The first consumers to pay the bill are average Americans. Cars, food products, household appliances—the list of upcoming increases is endless. 

Consumer unions warn: the temptation to buy "made in China" is likely to rise again if "made in Europe" fails to remain competitive. Of course, Trump promises compensation, but the inflationary mechanism cannot be tamed by decree. Electoral dynamics: a risky strategy? As the US elections approach, Trump is betting on a showdown. He's capitalizing on foreign fears and national pride, but he's taking the risk of seeing his base hit by the economic repercussions. For many, this is a short-sighted calculation that could backfire in the next election if a recession takes hold.

The Outlook: Towards a Global Economy Under High Tension

A New Matrix of Global Trade With the abandonment of historic tariff thresholds, each country is reinventing its own bubble. Asia is playing it safe, Africa is temporizing, South America is moving closer to China—the former bipolar world is fading away in the face of a mosaic of competing economic zones, sometimes impenetrable, always wary. Collateral Risks: Threatened Supply Chains Global transport players (Maersk, DHL, CMA-CGM) are worried about major logistical paralysis: each surcharge disrupts the entire flow, each blockage spreads from one continent to another. Europe, traditionally the heart of trade, could lose its role as an essential platform if the protectionist spiral continues.

Possible Alternative Alliances: The European Union is accelerating ongoing negotiations with Mercosur, India, and Southeast Asia. But these new markets will not offset the volume or value of transatlantic trade. Some experts predict a concentration of global trade around three major poles: America, Asia, and a partially marginalized Europe if it fails to build new, credible and aggressive alliances.

Conclusion: The New Era of Tariffs

Through this painful saga, history will remember the brutality of a decision, the speed of a fall. Trump, true to form, imposed his vision of a world where force prevails, where tariffs become the ultimate weapon. Europe is taking the hit, dividing itself, trying to bounce back – but nothing will ever be the same again. Tariffs below 15% are now history; the new normal is being written in suffering, accelerated change, and mistrust. And all this, at a time when the world needed calm, legal certainty, and a minimum of predictability. The burning question remains: who will emerge from this storm alive? And for how much longer will we survive our displays of power?