EU member states agree first wave of retaliatory tariffs
euronews.com
euronews.com
The European MO in that respect is very consistent : take time to deliberate, reach consensus and apply pressure in kind. It's at odds with the news cycle but I prefer that over instant gratification.
The EU spent €326 billion on its military in 2024. Add €350 billion to that, and you're looking at real-value spending higher than the U.S. military budget. On top of that, if that money is spent within the EU, you get economic growth plus full independence from the U.S.
Trump is overplaying his hand with both the EU and China—especially with China, where some minerals essential to modern manufacturing are mined and processed almost entirely there (90%+ in some cases). You can't do cost-effective manufacturing in many industries without China—at least not for many years to come.
Brussels is watching amazed, as Trump destroys the US economy. "Nobody in the Commission thought that the US government would be this stupid and self-destructive," an EU official tells me. "That they would blow up their own country by letting ChatGPT make their trade policy." EU officials are quietly preparing brutal countermeasures — but they’re in no rush. Markets are doing the work for them. Here’s what’s happening behind the scenes: Trump’s chaos is collapsing the US markets faster than any EU retaliation could. Inside the Commission and among EU governments, the mood is: Don't give Trump an excuse to blame this on others. Since February, the S&P 500 has dropped 20%. European officials believe Trump's trade chaos is backfiring — and see no reason to escalate while the damage grows organically. Inside the Commission and among EU trade ministers, the mood is calm — almost mocking. “We’ll just let them stew,” another senior official says. “If Trump doesn’t blink by the end of the month, we’re ready to hit hard.” But for now? They'll watch him sweat. German Economy Minister Robert Habeck summed up the mood: “We're under no time pressure. The Americans are under pressure and are now in a position of weakness,” he said. “The damage can get even worse — that’s why we must act calmly, carefully, but decisively.” Habeck also mocked Elon Musk’s call for a US-EU "zero-tariff" deal: “It's sign of weakness and fear. If he has something to say, he should go to his President... Before we talk about zero tariffs, stop the nonsense and mess you just made in the last week.”
If the US wants tarrifs, that is their business. EU merely balances it.
But on the US side - can a US citizen maybe explain the legal basis of the current tectonic shift in trade policy enacted through the tariffs? So far I assumed that the federal executive branch could only use tariffs to address security concerns or unfair practices. The actual policy change (especially the 10% base rate) is definitely more than that.
All the analysis I've read about it say that the one-sided implementation of broad tariffs is not legal according to current US laws.
It doesn't matter though until it's litigated, goes through courts, appeals, Supreme Court, while all that process is ongoing the tariffs are there. And who the fuck knows how the Supreme Court will decide on this in the end?
The challenge of course, is that it takes a lot of time to legally challenge it, and in the meantime, we have this chaos.
This is why choosing a moral, steady, wise leader is important. The system can't keep up with the alternative.
The conclusion ought to be that the executive shouldn’t have such powers.
DOGE is also an example of this. No clue whether for the better or worse. But the mechanism being used was put in place by Obama during affordable care act overhauls, as part of USDS (US digital services).
The courts, as usual, will first decide which outcome they prefer. They will then try to find some reasoning that will give them that outcome without looking too foolish. The latter step is easy in this case, but it's at least plausible that the courts don't want to crash the global economy. So it could go either way.
Regardless, this is likely to take a while. Courts are slow, especially on contentious issues.
It's also possible that the executive just tries to ignore an unfavorable ruling, as they have already done in other instances; nobody really knows what will happen in that eventuality...
tl:dr Congress has for various historical reasons decided to cede more and more power over trade regulation to the executive branch over the years, starting all the way back in the 30s. This has resulted in the president having almost unilateral leeway to decide what constitutes "security concerns or unfair practices" when it comes to trade. And until congress passes a bill to reign in that power, it is probably legal for the president to decide that almost anything is 'unfair' and that basically any response is reasonable.
There is not a lot of case law on this, so the final outcome is unpredictable.
Wild times.
They definitely can't, given that tax decisions require unanimity. Like, if they didn't get this sorted when they had Ireland over a barrel in 2011, it's probably not going to happen. Full disclosure: I am an Irish citizen.
Irish-Americans are less ambivalent about their roots than many other people of European descent - being excited about being part-German in Missouri is tantamount to being excited about watching paint dry, for example - and the fact that a man of Irish descent was President of the United States within two centuries of the "famine" and after centuries of oppression by the English boosts the credibility of America as a "land of opportunity", even if only in retrospect.
In "normal" times this is how the US operate, too. There are various industrial regional interests that lobby the federal government, and then a decision is made.
It gives a quite transparent off-ramp: if you start to cooperate, I will cooperate.
There's no point in not playing tit-for-tat in this situation, not retaliating is a losing strategy.
but the problem is the real game being played is different because the political process ends up diverging from maximising value in the economy. the free trade argument is this is because the political process is captured by concentrated interests who benefit from tariffs to reduce competition. the deadweight loss caused by tariffs to the rest of society is not properly accounted for in the political process because the cost is diffused over many people. other people who accept the text book comparative advantage argument but reject free trade will claim to have a different optimisation function that is not purely maximising value in the economy. for example maybe they think its important to have a strong manufacturing base in order to make it easier to re-arm to fight a conflict.
but if we accept this situation then its difficult to say what the optimal strategy is because you don't really know the payoff matrices for the players. even what they tell you could be a lie and might be difficult to derive what their values are based on their actions.
In this case, the aggressor inflicted much pain on _itself_, before the tariffs really even went into operation, that it has already partially backed down, but that’s kind of unusual that it would happen so quickly.