The U.S. president signed an executive order last January, delegating to a group of technocrats to review trade practices and policies with selected trade partners and to issue recommendations for the new tariff system. The initial deadline for submission of reports is April 1, 2025.
A week ago, President Trump announced a plan to introduce import tariffs of 25% on imports from the European Union – the US-EU bilateral trade forms from the revenue perspective, globally, the most international trade relationship.
The average import tariff value for EU exports to the U.S. is 1% – total annual imports from the EU account for EUR 500 billion. Based on the surveyed analysis of potential increase of tariffs accompanied by other “hypothetical” measures, such as retaliatory tariffs response, reduced imports, the U.S. federal government will increase its budget from the EU based duties yearly for approximately EUR 50 – 60 billion.
The EU officials have responded to the announced U.S. import tariff measures, saying that if the introduction of proposed “severe” tariffs, from their leading trading partner becomes a reality, the EU would respond reciprocally, to protect EU businesses, consumers, and economy.
If the U.S. proposed tariffs against the EU exports, they would become a reality, and the effects would be seen in an increase of the EU imports, a reduction of exports, and higher prices for U.S. consumers.
Stay tuned.
Aleksandar Delic
1stopVAT Indirect Tax Manager – E-Commerce