Morning opening: Forget markets for a second
Jakub Krupa
US president Donald Trump have signaled no intention to back down on his tariffs policy over the weekend, as he urged reporters to “forget markets for a second” and insisted “we have all the advantages.”
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” he said amid continuing slumps on global markets.
This morning, EU ministers will meet in Luxembourg to consider the EU’s response and hear the unfiltered version of EU trade commissioner Maroš Šefčovič’s meetings with US counterparts late last week.
On social media, he said that he told US commerce secretary Howard Lutnick and US trade representative Jamieson Gree that Trump’s tariffs were “damaging” and “unjustified.”
Today he will probably ministers not only on what he thinks of them, but also on what the bloc could do in response as there are first signs of internal divisions within the EU.
Italy and Spain are understood to be among the more cautious countries willing to avoid a further escalation, while France’s Emmanuel Macron leads the more hawkish group, after he appeared to call for suspending French investments in the US as part of the reaction.
I will bring you all the latest political reaction from across Europe, as we also monitor the latest on Ukraine, Le Pen and France, and other stories from the continent.
It’s Monday, 7 April 2025, it’s Jakub Krupa here, and this is Europe Live.
Good morning.
Key events
Habeck also repeatedly warns against individual countries’ interests overshadowing the need for a united EU response.
He says:
“The stock markets are already collapsing and the damage could become even greater. It is therefore important … to act clearly and decisively and prudently, which means realising that we are in a strong position. America is in a position of weakness …
If every country is counted individually, and we have a problem here with red wine and there with whisky and pistachios, then it will all come to nothing.”
US tariffs calculations are ‘nonsense’, German economy minister says
Outgoing German economy minister Robert Habeck is not mincing his words this morning in response to a question on US tariffs and how they were calculated.
He says:
“The calculations, from my point of view, are nonsense. Even the basis of the calculation is nonsense.
The assumption that a trade budget surplus or deficit is a problem in itself, is a wrong estimation, because in the end, globalisation serves all economies, and especially the American economy, [which] has [seen] huge growth figures in GDP, better than a lot of European countries. So you see, if we the rest of the world, are selling cheaper goods to the American economy, it’s of use of the American economy.
So, even the basis of the calculation that, the economical philosophical basis, it’s nonsense.”
He adds that European partners need to “stay united” as they will not be able to resolve the problem going alone.
Habeck is also asked about Elon Musk’s comments over the weekend, calling for free trade with the EU.
Making a video appearance at a rally of the far-right League party, Musk said “ideally, both Europe and the United States should move to a zero-tariff situation, effectively creating a free trade zone between Europe and North America.”
But Habeck says he sees his comments as “a sign of weakness and maybe of fear,” given the reality of US actions is “completely different.”
“If he has something to say, he should go to his president and say [it]. Before we are talking about zero tariffs, let’s stop the nonsense, … the mess you have just made in the last week,” he says, adding it is “ridiculous.”
‘All options on table right now’ on countermeasures, Swedish trade minister says
Swedish trade minister Benjamin Dousa says the US decision was “extremely unfortunate,” and the EU “stands ready for countermeasures that are well targeted and proportionate,” with “all options on the table right now.”
“We’re going to discuss the countermeasures, and Sweden will be in favour of countermeasures, but always be open for negotiations,” he says.
He adds “they have to be well targeted and proportionate but Europe wants more trade with all countries and continents.”
“When China, when Canada, when the European Union, for the coming days and weeks, will put into place countermeasures, it will put a strong pressure on the US administration to negotiate with us,” he says.
Asked if US tech companies could be targeted, he says “all options are on the table right now” with focus on maintaining EU unity.
“They have to be well targeted … so we don’t hurt European companies more than it hurts American companies.
Talks on how to position Europe in response to ‘paradigm shift’ in global trade, EU commissioner says
EU trade commissioner Maroš Šefčovič says EU leaders will “focus our discussion on the next steps, how to prepare our next move in relation vis a vis the US,” and how to prepare Europe for any potential “trade diversion” including support for companies.
But he describes the situation “as a paradigm shift [for] the global trading system.”
No tariffs like these for 100 years, Polish deputy economy minister says
Poland’s deputy economy minister Michał Baranowski is first to turn up at the meeting as Poland holds the rotating EU presidency until the end of June.
He says there has been “no tariffs like we have seen the last past week … for the last 100 years”.
He said the last similar episode “led to worsening of the Great Depression, which in the end … caused losses of millions of jobs, led to political extremism and … many historians point to [as one of] the sources … of international conflict”.
“This is what is at stake. I hope that we all will learn from history,” he says.
Baranowski says EU “regrets” the tariffs and is “still trying to understand the exact maths and ideas” behind Trump’s tariffs, but warns “it is very clear there will be no winners in this confrontation”.
“So far, the approach that we have seen is perhaps a little bit too much ‘shoot first, talk later’. I hope that we can switch to negotiations as soon as possible, serious negotiations with the United States, because again, the transatlantic economic relationship is the biggest one in the world,” he says.
He declines to take any questions.
Germany’s Merz wants to ‘restore competitiveness’ as he fears further deterioration on markets
German chancellor-in-waiting Friedrich Merz warned that international stock and bond markets could deteriorate further following the announcement of US president Donald Trump’s sweeping tariff regime, in a statement to Reuters.
“The situation on the international equity and bond markets is dramatic and threatens to deteriorate further. It is therefore more urgent than ever for Germany to restore its international competitiveness as quickly as possible,” Merz said in an emailed statement.
“This issue must now be at the centre of the coalition negotiations,” he added.
The talks between the conservative CDU/CSU party and the Social Democrats have been continuing at pace since elections in February, with the stated intention of completing the process by Easter in late April.
Markets recording sharp falls across Europe
If you’re interested in what is going on stock markets – a fair warning, it’s not a pretty sight – we have the latest on our business blog below.
UK’s FTSE 100 is 4.8% down, Germany’s DAX40 is 6.25% down, France’s CAC40 is 5.86% down, Stoxx Europe 600 is 5.74% down.
No talks with Europe ‘unless they pay us a lot of money on yearly basis’, Trump says
And if you’re wondering if there are any signs of Trump intending to soften his position against the EU, I wouldn’t hold my breath.
In comments aboard Air Force One overnight, he said that Europe “has treated us very, very badly,” and “has taken our leaders for a ride”, and declined to hold talks on changing tariffs “unless they pay us a lot of money on a yearly basis”.
He also once again criticised Europe for not spending a fair share on Nato.
Here are his comments in full, carried by Fox News:
The problem is that Europe has made a fortune with us.
You know, Europe also has had a tremendous surplus with the United States. Europe has treated us, is a little smaller, but they’ve treated us very, very badly. China has, but Europe has also. Europe has been very, very bad as Europe has taken our leaders for a ride.
They don’t take our cars, they don’t take our food products, they don’t take anything. If we take their cars, Mercedes, Volkswagen, BMW, you know, we take their millions of cars. They take no cars. They don’t take our farm product. They don’t take anything, Europe’s treated us very badly …
They are coming to the table, they want to talk, but there’s no talk unless they pay us a lot of money on a yearly basis, number one for present, but also for past, because they’ve taken a lot of our wealth away and we are not going to allow for that to happen …
This is not sustainable. The United States can’t lose $1.9tn on trade. We can’t do that and also spend a lot of money on Nato in order to protect European nations, we cover them with military and we then lose money on trade.
The whole thing is crazy, and I got elected on that basis. We explained it. The American people understand it a lot better than the media.
Spain to push for EU aid for industries hit by tariffs, minister says
Spanish economy minister Carlos Cuerpo said he would push the European Union to approve aid for industries hit by US tariffs.
Cuerpo also said on Monday the EU ministers will discuss a list of products to be submitted to retaliatory tariffs in response to the ones on steel, aluminium and cars, Reuters reported.
Cuerpo’s comments follow a speech by Spanish prime minister Pedro Sánchez last week in which he promised a financial package of loans and direct aid worth €14.1 bn, comparing the crisis response to that during the Covid-19 pandemic.
We need ‘calm, measured response’, Ireland’s minister says
EU ministers are expected to start arriving around 10am – I will bring you their doorstep reactions – but we are getting first lines from national leaders.
Ireland’s deputy prime minister and foreign, trade minister Simon Harris told Newstalk Radio that leaders agree on a need for a “calm, measured” response as he sought to play down the prospect of a retaliation on digital services that would be aimed at US big tech companies.
“My strong sense now is that the majority view by some distance is to take a calm, measured response and to try and get the US to the table,” he said.
Targeting digital services is “highly unlikely at this stage,” he said, Reuters reported.
Morning opening: Forget markets for a second
Jakub Krupa
US president Donald Trump have signaled no intention to back down on his tariffs policy over the weekend, as he urged reporters to “forget markets for a second” and insisted “we have all the advantages.”
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” he said amid continuing slumps on global markets.
This morning, EU ministers will meet in Luxembourg to consider the EU’s response and hear the unfiltered version of EU trade commissioner Maroš Šefčovič’s meetings with US counterparts late last week.
On social media, he said that he told US commerce secretary Howard Lutnick and US trade representative Jamieson Gree that Trump’s tariffs were “damaging” and “unjustified.”
Today he will probably ministers not only on what he thinks of them, but also on what the bloc could do in response as there are first signs of internal divisions within the EU.
Italy and Spain are understood to be among the more cautious countries willing to avoid a further escalation, while France’s Emmanuel Macron leads the more hawkish group, after he appeared to call for suspending French investments in the US as part of the reaction.
I will bring you all the latest political reaction from across Europe, as we also monitor the latest on Ukraine, Le Pen and France, and other stories from the continent.
It’s Monday, 7 April 2025, it’s Jakub Krupa here, and this is Europe Live.
Good morning.
