European Union leaders fear that higher tariffs on European goods from the US will widen the wealth gap among member states, Politico reports, citing sources.
They point out that if the US escalates the trade war, richer EU countries will start bailing out their companies with financial injections, given their ability to do so. Meanwhile, poorer EU countries have extremely limited resources to support businesses that may fail.
“Not all member states have the same fiscal capacity“, said an EU diplomatic source. This will increase economic inequality in the European Union.
In this context, the Italian Minister of Economy and Finance, Giancarlo Giorgetti, earlier proposed simplifying the rules for spending common EU funds. His Spanish counterpart, Carlos Cuerpo, said that the proceeds from the EU's retaliatory tariffs on US goods could be used to support affected sectors of the economy.
These and other proposals will be discussed at a meeting of the heads of the financial services of the EU countries in Warsaw on 11-12 April.
In general, the EU fears that aggressive US actions could slow down the growth of the EU economy and lead to a reduction in the number of jobs in the union countries. At this meeting, the ministers hope to develop a common strategy for negotiations with the US during the 90-day pause and for the EU's response in case an agreement cannot be reached with Washington.
“We can now develop a strategy, we have 90 days to prepare in case we cannot reach an agreement with the Americans“, another source told Politico.
On April 2, US President Donald Trump announced the introduction of tariffs on goods from 185 countries and their territories. For all EU countries, the tariffs amount to 20%. On April 9, the EU Council approved the first package of tariffs on US goods, which will come into force on April 15. The tariffs are being imposed in response to tariffs on steel and aluminum adopted by the US government.
According to Bloomberg, the tariffs will apply to 21 billion euros of US imports.
On Wednesday, Trump said he was delaying the increase in tariffs for 90 days for countries that have shown a willingness to negotiate. They will be subject to import duties of 10%.