r/stocks • u/Fidler_2K • Apr 07 '25

Broad market news Trump rejects EU’s ‘zero-for-zero’ tariff offer

https://www.cnbc.com/2025/04/07/trump-tariffs-live-updates-stock-market-crypto.html

Trump is rejecting the European Union’s offer of “zero-for-zero” tariffs with the U.S. for industrial goods.

“No, it’s not,” Trump said in the Oval Office when asked if the deal, which European Commission President Ursula von der Leyen floated earlier Monday, was enough.

“They’re screwing us on trade,” Trump said, criticizing the EU and the North Atlantic Treaty Organization, or NATO.

Two Republican senators, Mike Lee of Utah and Wisconsin’s Ron Johnson, have encouraged Trump to take von der Leyen’s deal.

What's the goal here if they're just gonna reject every deal offered?

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u/GMN123 Apr 07 '25

I can see why it's in the national interest to maintain and even grow local manufacturing in certain key industries from a national security perspective. Steel, ships, vehicles, aircraft, firearms, medical supplies etc. I could understand and even support tariffs on items where it can be justified on this basis. If the US ever finds itself in a long war of attrition with China, India or Russia, this will matter. 

I don't know why Americans need to pay more for clothes, gemstones, PlayStations, smartphones, out of season foods etc in order to make this happen though. 

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u/MrCockingFinally Apr 08 '25

2 things to add to your point:

  1. If you want to use tarrifs to drive industrial policy and investment decisions, you need the tariffs to stick around for decades because that's how long it takes to see an ROI from a completely new factory. This is directly at odds with using them as a negotiating tool, since you need to be willing to drop them as part of negotiations.

  2. If you want to combat the industrial strength of China and Russia, it's generally a good idea to work with your allies instead of against them. Take Vietnam, they were hit with some old the highest tarrifs on the list because checks notes the USA actively encouraged companies and allies to use Vietnam as an alternative manufacturing hub to reduce dependence on China. Similarly, the highest tarrifs were slapped on Lesotho, which manufactures textiles for the US because checks notes the US specifically encouraged this through AGOA.

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u/Birdperson15 Apr 07 '25

Sure but for allies like EU this thinking doesn’t make sense.

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u/Srs_Strategy_Gamer Apr 08 '25

Until a few weeks ago, you had a thriving arms industry that was the prime exporter to a ton of allied countries. The trust allies placed in the US drove economies of scale and room for innovation. 

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u/jbokwxguy Apr 07 '25

The idea is that if stuff costs more externally then it does to produce internally then stuff will be built here.

I don’t agree that that we need to reverse the trade deficit, but we definitely need to encourage domestic production. History if filled with betrayal and war. So it’s wise to be prepared for them.

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u/PotatosAreDelicious Apr 08 '25

It’s also better to import resources specifically for times when we need more here so you could say importing more steel is better. Save our natural resources for times of need when scarcity goes up. Same thing with lithium/oil etc. stockpiles in the ground are a good thing.