In March, President Donald Trump imposed a 25% tariff on imports of steel, aluminum, automobiles, and certain automobile parts. European Union (EU) members, except Hungary, announced retaliatory tariffs of 10% to 25% on specific U.S. imports.{/div} Qn April 2, Tramp proclaimed, ‘Liberation Day’ and added a global baseline tariff of 10%, plus customized so-called ‘reciprocal tariffs.’ Because the 2024 U.S. deficit with the EU was 39% of imports, he imposed a ‘discounted’ 20% reciprocal tariff on most EU goods not subject to the 25% tariff.

After a week, excluding China, Trump suspended reciprocal tariffs for 90 days to facilitate negotiations, and the EU delayed its retaliation.

While this may appear to be Trump starting a trade war, in reality it’s Trump ratcheting up a long-simmering war against the United States fought with protectionist

Kenin Spivak

trade policies, including by some of our closest allies.

Set aside that Trump’s reciprocal tariffs are actually punitive tariffs, that the trade war is depressing global stock and bond markets, raising the specter of recession, and threatening U.S. economic primacy. j !-StartFragmcnt-}Those are criticisms largely based on trying to do too much, too quickly. Turning to the disease, Trump is right. We sometimes are treated better by our enemies than by our so-called trade allies. That’s before counting the trillions of dollars America has spent on their defense.

Together, the U.S. and EU represent almost 30% of global trade and 43% of global GDP. Last year, the U.S. exported $370 billion of goods to the EU and imported $606 billion, generating a $236 billion deficit. The U.S. last had a surplus with the EU in 1991.

Most Americans don’t realize how powerful the U.S. economy is compared to the EU. In 2024, the U.S. GDP exceeded $29 trillion (about $86,600 per person), compared to $19 trillion for the EU (about $45,300 per person). When the EU takes advantage of the U.S., it really should think twice.

High tariffs are not Europe’s main offense. Instead, the EU deters U.S. competition by requiring American companies to comply on a worldwide basis with its far-left antitrust, censorship, data privacy, and DEI rules; limits government purchasing to products with at least 50% local components and EU ownership; and sets standards for non-EU companies that vary country-by-country, making it prohibitively expensive to do business in the EU.

One of the starkest results of the trade imbalance is the auto sector. Last year, the U.S. imported 757,654 new vehicles from the EU, but the EU imported only 169,152 new vehicles from the U.S., many of which were manufactured by U.S. subsidiaries of EU automotive companies.

The U.S. is the world’s second-largest agricultural trader, behind the EU. Over the last 25 years, the share of U.S. agriculture exports going to the EU dropped from 15% to 7.2%. Total exports grew from about $9 billion to $13 billion, well below inflation.

Conversely, from 2013 to 2024, U.S. agriculture imports from the EU nearly tripled to about $34.5 billion.

In February, Trump called the EU’s trade practices an ‘atrocity’ and asserted that the EU ‘take[s] almost nothing and we take everything from them.’ According to the U.S. Trade Representative report on Foreign Trade Barriers, EU barriers include, among many others:

• Tariffs up to 26% for fish and seafood, 22% for tracks, 14% for bicycles, 10% for automobiles, and 6.5% for fertilizers and plastics. Tariff codes improperly reclassify processed foods into higher tariff categories.

• EU law restricts non-EU ownership in numerous sectors.

• Packaging and labeling requirements, standards, and technical barriers impede market access for U.S. products that meet international standards, including chemicals, medical devices, wine, spirits, food and agricultural products, meat, and live cattle.

• Tire EU imposes fines up to 20% of the worldwide revenue on large digital service providers that fail to comply with its censorship, advertising, and content rules. The EU uses this authority to undermine U.S. competitiveness.

• Data maintained outside of the EU must comply with rales that conflict with U.S. law, and France requires that cloud providers that handle ‘highly sensitive’ data must be at least 61% EU-owned and ‘immune’ from non-EU laws.

• Quotas, subsidies, and content restrictions limit the opportunities for U.S. produced film and television content, and U.S. owned content distributors, while AI and intellectual property laws limit the rights of creators to be remunerated for their content, or maintain confidentiality.

• Numerous EU countries require EU nationality to practice law, and for other professional licenses.

While income and savings rate disparities are in part responsible for the EU-U.S. trade deficit, the breadth of restrictions plays a significant role. The U.S. should not be subsidizing the EU’s economy, paying for its defense, or relinquishing control of international standards organizations to EU members. When it comes to global trade, liberté, égalité, fraternité is an empty slogan.

If the EU fails to make considerable concessions within the next few months, Tramp should respond with properly computed and targeted tariff and non-tariff measures. While this may reduce trade, economic growth, and prosperity, if well-calibrated, the blame — and the brunt of the cost — will fall squarely on the Europeans.

(Kenin M. Spivak is founder and chairman of SMI Group LLC, an international consulting firm and investment bank. He is the author of fiction and non-fiction books and a frequent speaker and contributor to media, including RealClear, The American Mind, National Revieiv, television, radio, and podcasts.)