Marcus Walker

Of course, there would be costs for the United States too on both the economic front, and because the economic ties are deep in both directions, and on the military front, because Europe also offers the US bases that allow it to project power worldwide.

And also, of course, NATO has been the foundation of US influence in Europe and the wider region.

Well, if it comes to this and the Europeans at least hope that it won't and that Trump will back down from his tariff threat, then this would be an economic break on both sides of the Atlantic.

If Trump effectively tears up the trade agreement that he reached with the European Union last year by imposing further tariffs, that will take away the promised tariff reductions that Europe was about to ratify and has now suspended.

thereby harming American businesses in Europe too, for European exporters to the US.

But research does indeed show that tariffs are overwhelmingly paid by Americans.

That is what the evidence shows.

That is, tariffs are effectively a tax on American import businesses and consumers.

Mostly, they're not money paid by Americans.

foreign exporters to the United States, rather they are a tax on Americans.

However, they also harm exporters from other countries because as the price of imported goods go up, so sales go down.

And the evidence does show that tariffs, while being paid by Americans, also depress other countries' exports to the United States.

But beyond that,

the European Union also has this so-called bazooka known as the anti-coercion mechanism or instrument, which would be a whole load of further tariffs and restrictions on American businesses in Europe.

That, however, would need active support from a majority of European countries, which currently is not there because most European governments still want to de-escalate this dispute with the US.

They don't want to raise the stakes even further.

Thank you.