Both the U.S. and European Union (EU) have just agreed to slap a 15% reciprocal tax on a wide range of products. The move, though seen as a retreat from free trade, is part of a larger strategic repositioning and not a full-scale trade war.

🔍 Key Reasons:
Trade Imbalance & Protectionism:
America has long accused the EU of imposing trade barriers and deriving excessive gains from transatlantic trade. The tariffs are designed to “level the playing field” and protect home industries from lower-cost imports.

Retaliation Against Digital Services Tax & Green Subsidies:
The EU has taxed US tech giants (like Google and Amazon), while both sides accuse one another of uneven subsidies (like US Inflation Reduction Act versus EU’s Green Deal). Tariffs are being used as a response to such policies.

WTO Standoff
As the World Trade Organization (WTO) dispute process weakens, both sides are utilizing bilateral instruments like tariffs to stay within compliance or resolve disputes.

Political Strategy:
American elections and rising European nationalism are inducing leaders to take a tougher stance on trade to please local businesses and voters.

📦 Impact
Consumers: They could pay higher prices for imported electronics, clothing, and car parts.
Enterprises: Some firms will benefit from less competition but lose from less access to foreign markets.
Global Markets: Increased volatility of logistics and trade, possible rerouting of supply chains (especially for EVs, pharmaceuticals, and farm products).

🧠 Professional Advice:
Although this seems like a backward move from globalization, experts believe that this will form a new trade agenda based on enhanced standards, digital trade, and sustainable practices.