The rules-based international trade system that is largely shaped by transatlantic cooperation now faces one of its most serious tests. Under President Trump, the U.S. has adopted a more protectionist stance, imposing 50% tariffs on steel, aluminium, and automobiles, along with a 10% tariff on all EU exports to the U.S., which could rise to 50% if no agreement is reached by July 9. This is a departure from the bipartisan consensus established after World War II that free trade benefits all parties.

Figure 1. Net trade in goods and services as a % of GDP