Escalation of US-EU Trade Friction: Who Will Blink First?
Jun 26,2025 | Elfbar
The Onset of Trade Tensions
The US - EU trade relationship, once a pillar of the global economic order, has hit a rough patch. The US's recent decision to impose tariffs on Chinese steel home appliances shocked the international trade community, and the EU is preparing to retaliate. This friction emerged at a bad time, with global economic growth forecast downgraded due to factors like the COVID - 19 pandemic and geopolitical uncertainties.
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US Strategy and EU's Response
The US move was part of its broader trade strategy to protect domestic industries, reduce trade deficits, and assert dominance. But it negatively impacted the EU, a major exporter of steel and home appliances, disrupting trade flows and causing business losses. In response, the EU is considering counter - measures, including imposing tariffs on US goods, filing WTO complaints, and subsidizing domestic industries. Both sides' determination creates a high - stakes standoff.
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Impacts on Consumers, Businesses, and the Global Trading System
The trade war already affects consumers on both sides, as tariffs raise prices and reduce purchasing power. Businesses face supply chain disruptions, leading to production delays and losses, especially for small and medium - sized enterprises. Moreover, the US - EU trade friction undermines free trade and multilateralism. If the tit - for - tat continues, it could set a bad precedent and endanger the global trading order. As the situation evolves, we'll closely analyze each side's strategies and their impact on the global economy to see who will make the first move to ease the tension.
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