Warning against Trump's tariff threat: A risky move that hurts allies

President Trump's renewed tariff threats against the European Union are a dangerous escalation that could backfire economically and geopolitically. The EU is not just a trading partner but a key ally, and such tactics undermine transatlantic relations. The digital services tax, while imperfect, was designed to ensure that global tech giants pay their fair share in countries where they operate. Critics of the US threat say it is an overreach and a violation of World Trade Organization principles. For Spain, a trade war would be costly. Spanish exports to the US, including olive oil, wine, and machinery, could face higher tariffs, hurting small and medium-sized enterprises. Consumers on both sides would see higher prices. Economists warn that tariff disputes rarely lead to long-term solutions and often spiral into destructive cycles of retaliation. The EU is prepared to respond with its own tariffs on US goods, which could harm American exporters. Moreover, the threat comes at a time when global cooperation is needed on issues like climate change and pandemic recovery. Alienating allies with unilateral tariffs weakens the collective ability to address these challenges. Opponents argue that negotiation, not confrontation, is the better path. The US and EU should work through existing frameworks like the OECD to resolve tax disputes rather than resorting to tariffs that harm both economies.