Big Tech Is a Target If 50% EU Tariff Threat Stays

Donald Trump has delayed his 50% tariffs on the European Union just days after first threatening them. Perhaps by breakfast, he’ll have changed his mind again. We’re seeing the limits of the madman negotiating strategy: The longer it lasts, the more it has the effect of crying wolf. Financial markets are reacting somewhat soberly and looking past the bluster. Europeans should do the same and avoid the trap of giving in to a bully — however dominant and well-armed he may be.

Just as the EU had to keep calm and carry on negotiating when Trump was threatening 20% blanket tariffs — and likewise when he hit pause for 90 days in the face of financial-market turmoil — so it must continue when facing a raised hammer like a 50% tariff. Yes, the economic impact of such a doomsday scenario would be big: Total exports to the US would fall by half, according to Bloomberg Economics, which would be brutal for a Germany facing another year of zero growth. Yet US GDP would also fall by over 2% and prices would rise over 1%, making it unlikely they would stay in place long — one reason why last week’s stock-market selloff was relatively contained.