Washington's aggressive trade policies are pushing the European economy to the brink of a new crisis, while analysts warn that the EU may be forced to remodel its entire economic model to serve American interests.
The European deadlock against American tariffs
The European steel and aluminum sector is taking a heavy blow from the high tariffs imposed by the Trump administration. Despite a summit meeting between US–EU trade officials in Brussels in November, an agreement seems distant: Washington appears willing to reduce tariffs only if the EU relaxes its strict digital regulations—something Brussels is not accepting, for now. According to reports, Europe is seeking better terms on a range of products—from wine and beverages to medical equipment and pasta—while also requesting a 50% reduction in tariffs on steel and aluminum.
"Europe is losing the steel battle"
The high tariffs were aimed at strengthening American metallurgy, explained investor Fyodor Sidorov to Izvestia. However, the pressure is now being transferred to European steel mills, which are forced to channel their production to other markets, where they face fierce Chinese and Turkish competition.
The energy trap for the EU
Simultaneously, the complete ban on energy imports from Russia will deliver a strong shock to the European economy, reducing GDP by several percentage points and skyrocketing costs for energy-intensive industries. This will push Europe to turn to more expensive American raw materials, increasing—rather than reducing—its energy dependence on the US, points out businessman and fund manager Denis Astafyev.
The risk of relocating production to areas with cheaper energy is increasing, which could inflict structural damage on European industry. Instead of achieving independence from third powers, the EU may ultimately find itself trapped in a new strategic dependence—this time on the United States as the central supplier, warns analyst Tural Aliyev of Freedom Finance Global.
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