Concerns are mounting over a potential escalation of the trade dispute between the United States and the European Union, as US President Donald Trump has threatened to impose tariffs. Düsseldorf-based economist Jens Südekum, also an economic advisor to German Finance Minister Lars Klingbeil, has cautioned that such a trade war would significantly impact Germany’s economy.
Südekum, in comments to the Handelsblatt newspaper, stressed that while Germany would face considerable challenges, the United States itself would be disproportionately affected.
The EU’s decision to hold off on immediate retaliatory measures, awaiting developments until August 1st, is deemed by Südekum to be a prudent approach. However, he emphasized the necessity for the EU to respond swiftly and decisively should the situation escalate beyond that date.
Despite the potential for conflict, the economist remains cautiously optimistic that a resolution can be reached before the deadline. He noted President Trump has previously retracted similarly bold pronouncements. Südekum, however, underscored the importance of ensuring any eventual agreement does not result in a deterioration of trade conditions for the EU compared to the situation prior to Trump’s presidency.
