US President Donald Trump on Thursday (Jan 23) took aim at the European Union for what he describes as a highly imbalanced trade relationship. Speaking virtually at Davos summit, Trump expressed his dissatisfaction with the current state of trade between the US and the EU.
Trump criticises EU trade policies at Davos
“From the standpoint of America, the EU treats us very, very unfairly, very badly,” Trump said during his address at the World Economic Forum.
The 47th US president added, “They make it very difficult to bring products into Europe, and yet they expect to be selling, and they do sell their products in the United States. So we have, you know, hundreds of billions of dollars of deficits with the EU, and nobody’s happy with it. And we’re going to do something about it.”
“They essentially don’t take our farm products and they don’t take our cars, yet they send cars to us by the millions. They put tariffs on things that we want to do ... We have some very big complaints with the EU,” he added.
The EU had a trade surplus with the US in 2023, according to European Commission data.
Trump's comments came three days after he assumed office in his second term as president. Trade policies under Trump have been a central focus at Davos this year, especially his tariff threats targeting the EU, as well as other countries including China, Mexico, and Canada.
Earlier, on Monday, European Commission President Ursula von der Leyen said at Davos that the bloc is ready to work with Trump, noting that "no other economies in the world are as integrated as" the US and EU.
She also said recently that EU nations could potentially replace Russian liquified natural gas with American gas imports, something President Trump has repeatedly urged.
In December, Trump had warned that unless the EU increased its purchases of American oil and gas, it would face “tariffs all the way.” On Thursday, he reiterated the same saying, “They want to be able to compete better, and you can’t compete when you can’t go through the approval process faster. There’s no reason why it can’t go faster ... I’m trying to be constructive, because I love Europe.”
‘Tariffs if products aren't made in US’
Trump further told economic leaders that they will have to pay tariffs if their products aren't made in the US.
"If you don’t make your product in America, which is your prerogative, then very simply, you will have to pay a tariff—differing amounts, but a tariff," he said.
"Under Trump administration, there will be no better place on earth to create jobs, build factories, or grow a company than right here in the good old USA."
Trump has said earlier that he might impose tariffs of 25% on products from Canada and Mexico and 10% on goods from China.
US trade deficit and surplus with the EU
The United States is the largest market for EU exports, with machinery and vehicles accounting for the biggest trade deficit. In 2023, this gap amounted to €102 billion ($106 billion). On the other hand, the US has a surplus in energy trade with the EU, valued at €70 billion, along with a substantial surplus in services.
‘NATO members should raise defence spending to 5% of GDP’
Trump further said that he is going to ask NATO members to increase their defence spending.
“I’m also going to ask all NATO nations to increase defence spending to 5% of gross domestic product, which is what it should have been years ago,” Trump said, repeating his old remarks.
Defence ministers of several major US allies in Europe recently said that a contribution of 5% of GDP per country is unrealistic.
(With inputs from agencies)