U.S. President Donald Trump's stated reason for raising tariffs on European Union automobiles is that the EU has failed to comply with their trade agreement. In July last year, the United States and the EU struck a trade deal under which the EU agreed to eliminate tariffs on American manufactured goods, purchase $750 billion worth of U.S. energy and military equipment, and invest $600 billion in the United States. In return, Washington agreed to lower reciprocal tariffs on the EU to 15% and cut item-specific tariffs, including those on automobiles, to 15%.
The EU, however, has not moved as quickly on investment commitments as Washington had hoped. U.S. Trade Representative Jamieson Greer complained on March 11 that "the EU's trade agreement implementation rate is nearly 0%." Although the European Parliament passed the trade agreement in a plenary session on March 26, final entry into force requires a trilogue process involving the European Parliament, the European Commission and the Council. In a statement that day, the White House explained the measure by saying, "The EU has not made substantial progress in fulfilling its trade agreement obligations."
Still, because EU investment in the United States has consistently fallen short of American expectations, most experts see the real reason for reviving tariffs at this moment as retaliation for the EU's refusal to join the Iran war. Trump has criticized the North Atlantic Treaty Organization (NATO) at every opportunity, saying, "We will remember their behavior." Just before announcing the tariff restoration, Trump decided to pull out a large contingent of U.S. troops stationed in Germany, piling economic and security pressure on Europe simultaneously. About 84,000 U.S. troops are stationed in Europe, with Germany hosting the largest contingent at roughly 36,000. Trump has also signaled his intent to reduce troop levels in Spain and Italy, both of which have clashed with him publicly.
With cracks widening in the transatlantic alliance, individual nations are expected to accelerate their go-it-alone strategies. European countries have signaled plans to strengthen their own defense capabilities without U.S. help. German Defense Minister Boris Pistorius told the dpa news agency that "the withdrawal of U.S. troops from Europe, including Germany, was foreseeable," adding that "Europeans must take on greater responsibility for security." He also said he would discuss future tasks with the United Kingdom, France, Poland and Italy through a five-nation European military consultative body. The tariff increase announcement has revived concerns about potential retaliation, adding fresh uncertainty to trade relations.
With Trump breaking ranks with allies, observers say the possibility of retaliation against South Korea cannot be ruled out. Trump has complained that Asian countries such as South Korea and Japan import huge amounts of energy through the Strait of Hormuz but have not contributed troops.
In particular, in January, Trump warned that he would restore automobile tariffs to 25% over delays in passing South Korea's special law on U.S. investment. South Korea subsequently defused the threat by passing the legislation through the National Assembly in March. South Korea is ahead of the EU, which has yet to complete its legislative process, but behind Japan, which has announced concrete investment projects in the United States. As for the size of U.S. Forces Korea, USFK Commander Gen. Xavier Brunson told a U.S. House hearing that "we are focused on capabilities rather than troop numbers," hinting at reductions in line with the wartime operational control transfer plan.
A key variable is whether Trump's decisions will win congressional approval. Trump's withdrawal of U.S. troops from Germany is understood to have been made without consulting the Defense Department and has drawn criticism as a rash decision. Even Republican lawmakers have objected, saying it "could send the wrong signal to Russian President Vladimir Putin." Senate Armed Services Committee Chairman Roger Wicker and House Armed Services Committee Chairman Mike Rogers, both Republicans, said in a joint statement that "a hasty reduction of forces could weaken deterrence." Trump ordered the withdrawal of 12,000 U.S. troops from Germany in July 2020, near the end of his first term, but that move failed to materialize because of congressional opposition and was rescinded by the Joe Biden administration.
The Trump administration, having already drawn down its commitment to Europe, has approved arms exports to the Middle East and increased force allocations to the Gulf region. The U.S. State Department has approved $8.6 billion (about 13 trillion won) worth of arms sales to Israel, Qatar, the United Arab Emirates and Kuwait. Qatar will purchase more than $4 billion in U.S.-made Patriot PAC-3 missile interception systems, while Kuwait will acquire an advanced air defense system worth $2.5 billion. Secretary of State Marco Rubio approved the contracts without congressional review by invoking the "emergency provision" of the Arms Export Control Act.
The Wall Street Journal and Britain's Telegraph reported that the cancellation of plans to deploy U.S. long-range Tomahawk missiles to Germany, along with the depletion of U.S. weapons stockpiles caused by the Iran war, will hurt Europe more than the withdrawal of U.S. troops from Germany. The U.S. buildup of Middle East forces only deepens those concerns.
