Trump's Trade War: What Answers for the European Union?
The announcement, on April 2, 2025, of “reciprocal tariffs” by the United States has opened a sequence of profound break with decades of established trade policy practices, where the administration behaviour has been marked by dogmatic blindness, amateurism, and self-serving interests.
Finding a coherent strategy behind the rapid succession of measures, suspensions, and purported agreements is challenging, and the successive policy reversals are best explained by the administration’s own inconsistencies. The damage is nonetheless real for partners. For the European Union, it calls for firm but measured responses, without seeking symmetrical retaliation. While division is a threat, the inherent slowness of European procedures could be an asset in this context, as the United States will be confronted with its own contradictions. Broad retaliatory measures should be considered, beyond trade in goods, and the hypothesis of a first activation of the anti-coercion instrument should not be ruled out at this stage, on the contrary.
This analysis is only available in French.
Available in:
Themes and regions
ISBN / ISSN
Share
Author(s)
Sébastien JEAN
Associate Director of Ifri's Geoeconomics and Geofinance initiative
Related centers and programs
Discover our other research centers and programs
Geoeconomics and Geofinance Initiative
To analyze the impact of power rivalries and tensions on globalization, this initiative combines economic and political expertise. In the face of growing geopolitical risk, the goal is to decipher the dynamics of reconfiguration: protectionist pressures, sanctions, restrictions, industrial policies, and economic security concerns are redefining the rules of international trade. These tensions are also transforming international financial relations by undermining the foundations of trust and reshaping the global monetary system. They raise questions about the role of several key players: sovereign wealth funds, central banks, digital platforms, multilateral institutions, and financial infrastructure operators. In a context of profound disruption, simply refining existing approaches is no longer sufficient. The initiative is designed as a flexible model, drawing on diverse expertise to offer both broad overviews and targeted analyses. It also provides a platform for stakeholders and experts from various backgrounds to debate these issues freely.
Find out more
Discover all our analyses
New Cold War? What New Cold War? Confronting the Geoeconomic Fragmentation Narrative with the Data
It has become widely accepted that the world economy should be seen as increasingly shaped by forces of fragmentation, resulting from geopolitical tensions. This article takes another look at this narrative, using international trade data. While an aggregate analysis is consistent with a new Cold War narrative, whereby international trade is increasingly seen as split into two blocs, this is only a mix of very different outcomes. Far from being a widespread trend, geoeconomic fragmentation of trade flows is only significant in “hotspots”: Russia's foreign trade and China-US bilateral exchanges, and the impact is massive in these cases. Outside these “hotspots”, there is no tangible sign that geopolitical tensions have been shaping international trade patterns in terms of blocs, nor is there any hint of a trend toward nearshoring – to the contrary, in fact.
Central Securities Depositories and Geopolitical Risks: Challenges for European Policy
Central Securities Depositories (CSDs) form the backbone of financial market infrastructure by registering securities, settling trades, distributing cash flows, and managing collateral. While often regarded as mere financial “plumbing,” they in fact underpin strategic objectives such as advancing the Savings and Investment Union, curbing tax evasion, and reinforcing Europe’s geopolitical stance.
Manufacturing Risk: Geopolitical Doxa and the Corporate World
The evolving power dynamics between the United States, China, and Russia are creating new geopolitical realities that businesses can no longer evade. Geopolitical risk has become unavoidable, yet many companies remain unprepared to navigate its complexities. Corporate leaders can no longer afford to overlook its implications.
How Geopolitical Tensions Reshape Trade Patterns: Geoeconomic Fragmentation, or China’s Big Manufacturing Push?
A data-based analysis shows that widespread geoeconomic fragmentation of world trade is not visible, at least so far. In contrast, the geopolitically-motivated challenges to international coordination are striking, notably in relation with China's surging surplus in manufactured goods trade.