Anu Bradford, R. Daniel Kelemen, and Tommaso Pavone
“The European Union was formed to screw the United States. That’s the purpose of it and they’ve done a good job of it.” So claimed U.S. President Donald Trump in late February as he geared up to levy massive tariffs on Washington’s rivals and allies alike. His administration asserts that the EU hurts U.S. exporters by erecting barriers to free trade, including tariffs, state subsidies, and unfair regulations on American firms. The prior month, Vice President JD Vance had lodged his own complaints about Europe’s alleged perfidy, threatening that the United States might withdraw its security guarantees from Europe if the EU continued to aggressively regulate U.S. tech companies. This threatening rhetoric turned into reality in April, when Trump announced a blanket 20 percent tariff on goods from the European Union, as well as more targeted 25 percent penalties on steel, aluminum, and cars—all part of a blizzard of new tariffs on countries around the world that Trump dubbed “Liberation Day.” Although the Trump administration has since reduced the blanket tariff to ten percent as part of a 90-day “pause,” the targeted tariffs remain in place.
EU officials have approved a set of retaliatory tariffs targeting products such as poultry, grains, and metals, but these could still be suspended in reaction to the newly announced pause. But in seeking an off-ramp from tit-for-tat escalation, the EU may agree to make broader concessions to Washington. Those could include trimming the thicket of regulations that seek to protect EU citizens and constrain private companies. Were that to happen, the EU would risk losing what makes it truly influential in the world: its global regulatory superpower.
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