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Fabry, E. & Bertolini, M. “EU’s trade defense arsenal vs Trump’s imperialism”, Brief, Jacques Delors Institute, February 2025

Donald Trump is known as a master of unpredictability. But the direction of his second administration is now clear. It threatens the future of the European Union and the Europeans. There is no time for moral judgements. Europeans can argue about the fallacy of Trump’s economic reasoning, speculate about domestic legal procedures, checks and balances or a market reaction that might slow him down. The priority is to ensure that a strong unity among the 27 Member States allows for a strong pushback. This unprecedented deterrence strategy requires a willingness to use all available instruments and to be innovative.

Trump was expected to make extensive use of tariffs to reduce the record US trade defici of nearly a trillion dollars. But early announcements from the White House suggest much more than a rebalancing of trade flows. Trump II is very different from Trump I. The sequencing, targets, scope and level of tariffs announced since 1 February are leaving the rest of the world in stunning shock. Tariffs threats bundled with non-economic objectives (illegal migration and fentanyl flows from Mexico and Canada as well as EU regulations), takeover over strategic assets (Greenland and Ukraine’s CRMs resources), or closing the gap with third country’ tariffs illustrate a clear departure from any kind of legal constraint: trade agreements (USMCA and other FTAs), International law (inviolability of borders) and multilateral rules (WTO MFN principle).

Trump is dealing a massive blow to world trade in a bid to rebalance the global economy in favour of American interests. This is based less on economic considerations than on geopolitical ones. Ensuring US technological leadership is Trump’s dominant national security concern, and China’s increasing technological innovation is standing in the way. The rest of the world is a playground for a predatory strategy that uses tariffs bundled with non-tariff issues to acquire strategic assets and align third countries with US interests. The America First Investment Policy, unveiled on 21 February also proposes restrictions on foreign direct investment that would force a choice between the US market and the Chinese market, or the market of “other foreign adversaries or threat actors”.

The range of possibilities that could be considered in assessing potential tariffs is broad enough to prepare for a worst-case scenario involving the imposition of massive tariffs.

The focus of this paper is to map in detail the tools available for an EU trade defence strategy (see below the chart on justification, procedure, permissible measures and likelyhood) to assess the EU’s deterrence or retaliation capacity.