Europe will respond to any tariffs imposed by U.S. President Donald Trump in a proportionate way, the European Union’s commissioner for the economy told CNBC on Wednesday.
“If there is a need to defend our economic interests, we will be responding in a proportionate way,” Valdis Dombrovskis told CNBC’s Steve Sedgwick on the sidelines of the World Economic Forum in Davos, Switzerland.
“We’re ready to defend our values and also our interests and rights if that becomes necessary,” he added.
Since his inauguration on Monday, Trump has repeated his threat to impose tariffs on EU goods entering the United States, telling reporters that the EU was “very, very bad to us. So they’re going to be in for tariffs. It’s the only way … you’re going to get fairness.”
He also said his administration was discussing imposing an additional 10% tariff on goods imported from China, starting in February.
Dombrovskis said the U.S. and Europe were strategic allies, and it is important for them to work together, both geopolitically and economically.
European officials were talking to their U.S. counterparts to find a “pragmatic” solution to the discussion of tariffs, he said, noting that global growth could suffer if the economic relationship between the two nations were damaged.
“It’s important to maintain this trade and investment relationship because of this global economic fragmentation would set in, and there is a real risk of this happening, and the IMF estimates that it would mean a reduction of the world GDP by up to 7%,” Dombrovskis said.
The EU is keen to hold on to its economic ties with the U.S., noting that they have the largest bilateral trade and investment relationship and “enjoy the most integrated economic relationship in the world,” the European Commission states.
The balance of trade has been a particular bugbear for President Trump, with the EU having a trade goods surplus with the U.S. in 2023, but a deficit in services over the same period.
In 2023, the EU exported more than 502 billion euros’ worth ($522 billion) of goods to the U.S., while importing volumes in excess of 340 billion euros, resulting in a surplus, according to data from the European Commission.
This is a developing story and will be updated shortly.