Trump tariffs will hurt US most: Europe business lobby

The US president vowed Wednesday to hit the European Union with 25 percent tariffs -- the same level set to apply to imports from Canada and Mexico from next week, while China faces a 10 percent added tariff.

"It's not good for business," said Luisa Santos, deputy director general of BusinessEurope which groups together employer federations from 35 countries including France's Medef and Germany's BDA.

"But if the US does this with all its partners, it means that overall the biggest impact will be on the US economy," she said -- with imported products made more expensive to US consumers and industry alike.

The prospect of the European Union's biggest trading partner hiking tariffs on the bloc is "a situation we don't want," said Santos, for whom "we should be actually eliminating duties, not creating duties."

But she also voiced confidence "there will be a moment where the US understands that it's better to go to the negotiating table."

Santos made the point that many of Europe's exports to the United States are destined for European companies that are investing and producing in the country.

"So this could also be very negative for existing investments in the US," she said.

The United States is the largest source of foreign direct investment in Europe and vice-versa -- for a total value of 5.3 trillion euros in 2022, according to European Commission figures.

"For Europe, it's also a call to diversify, to look for other markets," Santos said. "We have alternatives."

Brussels has been working to broaden its commercial partnerships to hedge against souring relations with the United States -- with EU chief Ursula von der Leyen and her commission team currently in India to boost ties.

In recent months the EU has announced a strengthened trade deal with Mexico and the resumption of talks with Malaysia, as well as a major new agreement with the South American bloc Mercosur.