Europe Anticipated a Transactional Trump but Received Something Different.

Former President Trump has consistently expressed his disdain for the European Union, asserting that the bloc was established to “screw” the United States. He has pledged significant tariffs on European cars and implemented global steel and aluminum tariffs that could potentially affect around $28 billion worth of exports from the E.U.

For months, E.U. officials hoped to persuade the American president to avoid a damaging trade war. They aimed to soothe the administration with easy gains, such as increasing European imports of U.S. natural gas, while striving for a more comprehensive agreement.

However, it has become evident that the situation is more complex than they anticipated.

Following the activation of American tariffs on steel, aluminum, and products utilizing these metals on Wednesday, Europe responded with its own extensive package of retaliatory tariffs. The initial phase will commence on April 1, imposing tariffs up to 50 percent on items such as Harley Davidson motorcycles and Kentucky bourbon, with a second wave targeting crucial agricultural and industrial goods by mid-April, affecting Republican districts.

European leaders have made it clear that they did not wish to take such an aggressive action: They sought negotiations and continue to desire a resolution.

“But you need both hands to clap,” remarked Maros Sefcovic, the European Commission’s trade minister, on Wednesday. “The disruptions caused by tariffs can be avoided if the U.S. administration is willing to accept our outreach and collaborate with us to achieve a solution.”

Europe is grappling with an intricate challenge. Many European officials find it unclear what exactly Mr. Trump seeks. The administration occasionally describes tariffs as a means to create a level playing field, yet they are also viewed as a method to generate revenue for U.S. tax cuts or as a punitive measure against the E.U.’s regulations on technology companies.

Mr. Trump believes that Europe has not behaved fairly in its trade dealings. On average, Europe’s tariffs are marginally higher than those of the U.S.—3.95 percent compared to America’s 3.5 percent on European goods, as per ING analysis. However, specific products incur significantly higher tariffs upon entering Europe, such as vehicles, which face a 10 percent tariff.

Furthermore, Mr. Trump has criticized how Europe and other countries impose taxes on producers, suggesting that future U.S. tariffs may reflect those policies. Consequently, some rates he has proposed, like 25 percent on automobiles, would greatly exceed those he denounces in Europe.

“We’re reclaiming our wealth and bringing back many of the companies that left,” said Mr. Trump on Wednesday. He stated that U.S. tariffs would resonate with international approaches, although he acknowledged there would be “some instances where they are a bit beyond reciprocal.”

The Trump administration has not demonstrated a strong inclination to negotiate. In February, Mr. Sefcovic visited Washington but admitted progress was limited. President Trump has not had a one-on-one discussion with Ursula von der Leyen, the European Commission president, since taking office.

Without a clear grasp of Mr. Trump’s motivations and the absence of reliable intermediaries within the administration, devising a deal that spares consumers and businesses the burden is exceedingly difficult.

“It doesn’t feel very transactional; it feels almost imperial,” stated Penny Naas, a trade specialist at the German Marshall Fund. “It’s not about give and take—it’s a case of ‘you give.’”

This is why the E.U. is now emphasizing its ability to retaliate if necessary, signaling that further measures could follow should the Trump administration proceed with its threatened tariffs. The bloc aims to keep its responses proportional to U.S. actions to prevent an escalation of the conflict.

Despite their desire to avoid an all-out trade war, the E.U. has been preparing for months for this possibility.

“If those actions are taken, we will respond swiftly and decisively, just as we did today,” stated Olof Gill, a spokesman for the European Commission, during a press conference on Wednesday. “We have been diligently preparing for all potential outcomes. Today, we demonstrated our capacity for a swift, firm, and proportional response.”

The pressing question is: What will happen next?

Mr. Trump has pledged additional tariffs on European imports, including so-called reciprocal tariffs, which could take effect as early as April 2. He has also discussed significantly increasing tariffs on certain products, such as automobiles.

“It’ll be 25 percent across the board, and that will apply to cars and everything else,” Mr. Trump asserted in late-February comments during an Oval Office meeting. “The European Union was created to disadvantage the United States. That was its objective, and they’ve succeeded well in that, but now I’m president.”

European officials have made it clear that should conditions worsen significantly, they might utilize a new anti-coercion tool that would enable them to impose tariffs or market restrictions on service companies, potentially affecting tech giants like Google.

While Europe exports more tangible goods to the U.S. than it imports, it faces a substantial deficit in technology and other services, primarily due to Europeans being a significant market for social media and various internet-based enterprises.

Mr. Sefcovic has identified the anti-coercion tool as a possible route to “safeguard” the European market against external interferences, and other European leaders have expressed a readiness to consider its use specifically against the U.S.

Nonetheless, as Europe wishes to avoid exacerbating the trade war, targeting American tech firms is viewed as a measure of last resort.

“It’s more of a nuclear option,” remarked Carsten Brzeski, a global economist at ING Research.

Currently, European officials are optimistic that the threat of retaliatory tariffs will be sufficient to compel the U.S. to engage in negotiations. The proposed measures are likely to target products significant in Republican strongholds: items like Kentucky bourbon and Louisiana soybeans.

As businesses and workers confront dismal forecasts, the expectation is that they will reach out to their political representatives to urge them for negotiations.

The spirits industry, facing severe challenges due to the proposed 50 percent tariffs on whiskey, has already raised concerns. The sector was heavily affected by a previous, less extreme set of retaliatory tariffs during Trump’s first term.

“Reimposing these crippling tariffs when the spirits industry is already struggling” will “further hinder growth and negatively impact distillers and farmers nationwide,” stated Chris Swonger, the CEO of the Distilled Spirits Council, in a statement on Wednesday.

Political instability is already inflicting damage on some American companies. Tesla experienced a significant drop in sales in Germany in February and has seen a downturn across Europe, reflecting rising resentment towards Elon Musk, the company’s CEO and a close associate of Mr. Trump.

However, the administration seems willing to endure some economic hardship in pursuit of its long-term trade objectives, which aim at nothing short of restructuring global trade regulations.

“There is a transition period because what we’re undertaking is substantial,” Mr. Trump noted in a Fox News interview on Sunday.

To Europe, a scenario where Mr. Trump is determined to reshape the global order becomes increasingly perilous. The evolving conflict threatens to compromise its most significant trading relationship, one that both sides have traditionally viewed as mutually beneficial, while straining their close alliance with the United States.

“There are no two economies globally as intertwined as the United States and Europe,” remarked Ms. Naas. “Decoupling is not feasible at this point, which leaves us ensnared in this tariff dynamic.”

Ana Swanson contributed reporting.