Transatlantic Cooperation instead of Trade War: Scenarios, Options, and Policy Solutions

U.S. trade policy is currently marked by a high degree of unpredictability, making it difficult to anticipate the actions of the Trump administration with any certainty. Despite this climate of extreme uncertainty, political and economic actors within the European Union (EU) must adopt strategic positions to respond effectively to a wide range of possible developments. This study supports that effort by offering a comprehensive analysis of the current landscape, quantifying the macroeconomic, sectoral, and regional impacts of various scenarios, and outlining actionable policy recommendations. The central finding is clear: a trade war between the EU and the U.S. would inflict significant economic harm on both sides, with particularly severe consequences for certain regions and industries. Conversely, a trade agreement would yield mutual benefits.

Kiel Institute Experts