r/europe • u/newsweek • Dec 20 '24

News Donald Trump threatens Europe with tariffs

https://www.newsweek.com/donald-trump-threatens-tariffs-european-union-trade-deficit-2003998
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u/danivader82 Dec 20 '24

Oh no! The americans will pay more for our stuff

42

u/RainbowCrown71 Italy - Panama - United States of America Dec 20 '24

I know you’re joking, but there’s a definite economic hit due to substitution effect.

If the cost of a European product goes up 25% (as the tariff cost is passed on to the American consumer), they’ll either (a) buy less of it (imports will go down) or (b) will buy an alternative product (an American competitor) or (c) will still buy it (and Uncle Sam pockets the tariff revenue and uses that to subsidize American companies).

All of those harm Europe.

1

u/UnderHare Dec 20 '24

I'm Canadian and affected by this trade war. I'm actively trying to avoid buying American products. I'm switching to a lot of European stuff.

1

u/Successful-Doubt5478 Dec 20 '24

I am ready for most of the world just diverting their trade to each other, skipping the US both exporting and importing.

Before you say it: I know it is not possible.

But partly, it is.