EU under pressure: ways out of Trump's tariffs and China's flood of exports!

EU under pressure: ways out of Trump's tariffs and China's flood of exports!

The EU is currently facing enormous economic and geopolitical pressure from both the US and China. Political tensions are arising from looming American tariffs that could impact more than 500 billion euros worth of trade, at the same time that Chinese products are flooding European markets. Amid these challenges, the EU emphasizes the need to strengthen its internal market and adapt to new economic conditions. One reason for this strengthening is underdeveloped technological sectors within Europe, which are falling behind compared to the USA and Asia. Commission President Ursula von der Leyen is leading the effort to navigate the EU through this conflict and ensure competitiveness.

The EU is heavily dependent on exports and needs strong demand from both the USA and China to ensure economic growth. Yet productivity in the EU has fallen to just 80% of US levels since the 2010s. This is often attributed to the euro debt crisis, but many economists also see other causes for the stagnating economy. The lack of venture capital also contributes to the underdevelopment of the technology sector in Europe, where investment in startups is up to 15 times higher in the US than in the EU.

Need for reform in the internal market

In order to restore the competitiveness of the European economy, far-reaching reforms are necessary. The EU is striving to further deepen the internal market and reduce existing trade barriers. The internal market is now 30 years old and is still considered unfinished. The aim is to promote freedom of movement and to adapt market conditions to current developments, such as digital change. In 2022, laws on digital markets and services were passed. These are intended to create a safer and more transparent online environment and give users more rights, for example with regard to the right to repair.

The Chair of the Internal Market Committee, Anna Cavazzini, calls for the Single Market to become a central part of the EU's policy objectives in order to be more resilient to crises such as the economic crisis caused by COVID-19.

Strategies for economic recovery

Economists recommend further steps to strengthen Europe's economic structure, including the creation of a capital markets union and a common industrial policy to promote strategically important sectors. In addition, an increase in defense spending is encouraged to strengthen industry in Europe. A successful single market could also help reduce the US trade deficit with the EU.

There is agreement that the EU should not be intimidated by Trump's threats. Rather, it should push forward its own reforms in order to be able to cope with future economic challenges. A strong German-French leadership duo could be crucial in promoting this willingness to reform at the political level.

The EU faces the challenge of introducing ambitious reforms to avoid further economic decline and realize the full potential of the internal market. Daily Gazette and European Parliament agree that a decisive phase has now begun for the EU.