According to Bloomberg, US President Donald Trump's plan to impose strong tariffs on imports from Europe could defy the bloc's economic development.
In recent days, Mr. Trump has said that the European Union (EU) was established to weaken the US and pledged to impose a 25% tax on cars and many other goods while the 25% tax on steel and aluminum imported from the EU took effect from March 4.
Bloomberg believes this is a comprehensive tax rate, estimated to cost the EU 1.5% of gross domestic product (GDP), in the context of member countries already facing a "crisis of survival" due to skyrocketing energy costs and cheap imports from Asia.
Bloomberg analysts predict that in the worst case scenario, this tax could cost the European steel industry 12,000 jobs and force automakers to move production to the US.
European steel giant ArcelorMittal SA has warned that all of its factories are at risk of closing due to too much pressure, while the company itself has cut staff and narrowed operations in the domestic market. Their German rival, Thyssenkrupp AG, is also said to plan to cut 40% of its personnel in the coming years.
The Bloomberg article highlights the current weakness of the European economy compared to Mr. Trump's first term as President.
This is especially evident in the central region, where France and Germany are slowing growth, while the US remains a strong force as the main driver of world demand.
Trade tensions between the US and the EU have escalated since Mr Trump announced plans to impose a series of import tariffs to address what he described as a trade imbalance.
Last week, at a cabinet meeting, Trump reiterated that his administration would soon impose tariffs on imports from the EU.
On the EU side, European Commission President Ursula von der Leyen condemned the new US tariffs, expressing deep regret at the decision. In early February, she said the steel and aluminum tariffs "could not be without a response".
However, when sharing with the Financial Times, former European Central Bank (ECB) President Mario Draghi said that new within-bank trade barriers are a core issue.
Mr. Draghi warned that if trade barriers between member countries are not resolved soon, the EU's growth will be hit hard "more than any tax that the US could impose".
