Trump, trade, and investment
Trade policy
Fecha: enero 2025
Erik Jones
SEFO, Spanish and International Economic & Financial Outlook, V. 14 N.º1 (January 2025)
The second Trump administration moved quickly to use tariffs and other trade policy instruments to push commercial partners of the United States to offer more favourable deals for American firms and to encourage manufacturers to invest in the United States. The European response to this move is to contemplate buying more American liquefied natural gas and military equipment, while threatening a tit-for-tat retaliation with trade instruments. There is still more to do. Europeans could also take the opportunity to negotiate a limited free trade agreement with the United States alongside an agreement for greater mutual recognition of regulatory equivalence. And Europe could strengthen that response over the longer-term by shifting its growth model away from a dependence on exports and greater autonomy in military procurement. Such longer-term responses not only offer the promise of rebalancing economic relations across the Atlantic but also strengthening the transatlantic partnership.