The US and the 27-nation European Union are each others’ single biggest trade partners, with more than €1.6tn ($1.9tn, £1.4tn) in goods and services exchanged in 2024, according to European figures. That represents nearly a third of all global trade.
When Trump started announcing tariffs last year, it prompted threats of retaliation from many political leaders, including in Europe.
In the end, however, many, opted to negotiate instead.
Only China and Canada stuck by their threats to hit American goods with tariffs, with Canada quietly withdrawing most of those measures in September, concerned they were damaging the Canadian economy.
In a speech in Davos on Tuesday, Canadian Prime Minister Mark Carney urged “middle powers” to unite to push back against the might-makes-right world of great power rivalry that he warned was emerging.
“When we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what is offered. We compete with each other to be the most accommodating,” he warned. “This is not sovereignty. It is the performance of sovereignty while accepting subordination.”
Looming in the background of the trade tensions is a pending Supreme Court decision over whether many of the tariffs Trump announced last year are legal.
