US President Donald Trump holds up the signed executive order for tariffs on almost all imported goods in the Rose Garden of the White House.
© picture alliance / ZUMAPRESS.com | Abe Mcnatt/White House
US President Donald Trump holds up the signed executive order for tariffs on almost all imported goods in the Rose Garden of the White House.
© picture alliance / ZUMAPRESS.com | Abe Mcnatt/White House
The Trump administration relies heavily on tariffs as an instrument of foreign economic policy. In April 2025, the White House announced a minimum tariff of 10 per cent on all US imports and raised tariffs on 56 countries and the European Union (EU), in some cases to even higher levels. Trump makes no distinction between allies and adversaries, and the EU is severely affected. The exact strategy Trump is pursuing with the tariffs is not entirely clear. The president promises to use tariffs to bring back production and protect domestic industry, while at the same time, seeing tariffs as a source of revenue to finance tax cuts, even if it is unlikely that they will cover the costs of his tax reform. The US president also sees the tariffs as a means of improving his negotiating positions with other countries. Trump wants to change what he perceives as unfair trade relations with US trading partners and force other countries to reduce their trade surpluses with the United States. In doing so, the US president is undermining the rules of the World Trade Organization, whose declining role in resolving international trade disputes is becoming increasingly apparent. The protectionist trade policy, the regressive tax policy, the dismantling of regulations and the administrative state as well as uncertainty about Trump’s additional plans for migration policy appear to be destabilising and shrinking the US economy. There is increased risk of a recession and greater social inequality, which could exacerbate domestic political tensions.
The EU faces difficult negotiations with Trump in the coming years, not least because the US president links his decisions on tariffs to foreign and security policy issues, such as increasing defence spending in NATO. Key divergences on policy are looming regarding China, the regulation of digital companies, and the implementation of climate rules. To force concessions from the EU, Trump may choose to repeatedly employ tariffs and other coercive economic measures.
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