Europe Prepares To Counter Trump’s Protectionist Policies

Transatlantic relations are going through a period of intense tension, marked by Donald Trump’s return to the American presidency. In this context, Isabel Schnabel, a prominent member of the European Central Bank (ECB) board, has sounded the alarm. She claims that a trade war between the European Union and the United States is “very likely”, due to the protectionist policies already announced by the American administration. If these measures, including high tariffs on European imports, were to materialize, they could destabilize the global economy. This threat, which particularly targets key sectors in the eurozone, poses significant stakes for the future of international economic relations.

An escalation of tensions orchestrated by American policy

Isabel Schnabel, a influential member of the European Central Bank (ECB) board, expressed clear concerns during an interview with the German financial advisory site Finanztip’s YouTube channel. “A trade war with the United States is very likely,” she stated, when she directly referred to the protectionist measures considered by the Trump administration. Among these measures, the imposition of a 25 % tariff on imports from Mexico and Canada is already triggering fears, and similar threats hang over European products. These policies particularly target Germany, the main trade surplus of the eurozone with the United States, thus further intensifying bilateral tensions.

According to Schnabel, these tariffs represent much more than a simple trade barrier: they could be “a poison for the economy.” By raising the prices of European imports, these measures would directly threaten households’ purchasing power and increase pressures on businesses already facing a fragile economy. The side effects would not be limited to costs: the sustainability of these uncertainties could also hinder investments and consumption, two essential pillars of economic recovery in the eurozone.

A global impact and possible responses

Beyond the immediate consequences for the European Union, Isabel Schnabel warns about the broader repercussions that a trade war could generate. She highlights the risk of an “inversion of the gains from globalization,” a process that has nonetheless significantly contributed to wealth creation in Europe over the past decades. “If globalization has brought significant wealth gains to Europe, we may now have to prepare for at least some of these gains to reverse,” she warned. This economic regression could be exacerbated by rising prices of imported goods, which could thus fuel social and economic tensions in many European Union member states.

In the face of this threat, the ECB shows a certain resilience by maintaining its course towards a 2 % inflation target. Isabel Schnabel recalls that several cuts in key interest rates, made in 2024, have brought this rate down from 4 % to 3 %. These adjustments aim to cushion economic shocks, although Schnabel admits that the room for maneuver is becoming limited. In the longer term, the European Union may need to rethink its economic strategy. Possible avenues include targeted trade measures to counter American protectionist policies. This dynamic could also encourage Europe to strengthen its strategic autonomy, reducing its dependence on external partners and anticipating similar crises in the future.

A trade war between Europe and the United States, although rooted in economic issues, reveals deep geopolitical fractures. The continuation of American protectionist policies would force Europe to reassess its alliances and bolster its strategic independence in the face of a partner that has become unpredictable. In this context, the choices made by European decision-makers in the coming months will be crucial for preserving economic stability and limiting the impacts on global supply chains. Such an escalation would not be limited to markets. It would also put significant strain on the principles of international cooperation that have underpinned transatlantic relations for decades.