US protectionism would be extremely harmful to US and Europe, says EU Commission

BRUSSELS (Reuters) – Increased protectionism of U.S. trade policy would be extremely harmful to both the United States and to Europe, European Economic Commissioner Paolo Gentiloni said on Friday.

U.S. President-elect Donald Trump has floated the idea of a tariff of 10% or more on all goods imported into the United States, which is Europe’s main trading partner.

“The level of integration between our economies is such that EU-U.S. trade relations are a stabilising economic and political force,” Gentiloni told a press conference.

“Despite trade disputes and regulatory divergences, both regions maintain a shared interest in upholding high standards, fair competition and stability in global markets,” he said.

“And in this context, a possible protectionist turn in the U.S. trade policy would be extremely harmful for both economies,” he said, adding the European Commission, which is in charge of EU trade policy, would work with the next U.S. administration to advance a “strong transatlantic agenda” and ensure that international trade channels remain open while making them more secure.

Gentiloni said the countries most affected by the potential increase in U.S. tariffs would be Germany and Italy because they exported the most to the United States. Tariffs would compound the problems manufacturers in the two EU countries were already facing, he said.

Tariffs could also have a negative impact on the U.S. economy itself by stoking inflation, with all its consequences, Gentiloni said.