Europe Should Hold Its Fire in Coming Tariff War

As America’s capricious trade war rolls on, the European Union may be Washington’s next target. The EU’s instinct to retaliate is understandable — but a tit-for-tat escalation is exactly the wrong response.

Although details are murky, the White House plans to announce what it calls “reciprocal” tariffs on April 2 — with rates that factor in everything from value-added tax to subsidies to regulation. It should go without saying that this idea would harm everyone involved. About one-third of EU goods exports to the US could suddenly face tariff rates of 20%, almost certainly throwing Europe into recession. The EU has prepared duties on as much as $28 billion in US products in return; Americans would see prices soar on (among other things) prescription drugs, manufacturing machinery and inputs for a slew of industries.