Donald Trump rejects EU's ‘very, very bad’ zero-for-zero tariff proposal: 'They don't take our cars, like Japan'

US President Donald Trump has rejected the European Union's proposal for an exemption from tariffs on industrial products, including cars, stating that it is not enough to address the transatlantic trade deficit. "The European Union has been very, very bad to us, they don't take our cars, like Japan in that sense, they don't take our agricultural product. They don't take anything practically," Trump told reporters at the White House.

What Did EU Propose in Trump Tariff War with US?

On Monday, European Commission President Ursula von der Leyen proposed a "zero-for-zero" tariff arrangement for industrial products, including cars, in a bid to defuse escalating trade tensions with the United States.

Speaking at a press conference in Brussels, von der Leyen stated, “We have proposed zero tariffs on industrial products... Europe is always ready to strike a good deal with the United States.”

However, she warned that the European Union (EU) would not hesitate to implement countermeasures if negotiations failed, vowing to "defend our interests" against President Donald Trump's aggressive trade policies.

Meanwhile, reports suggest that the EU is considering retaliatory tariffs of up to 25% on select American products, including food items and luxury goods.

How Much Tariff Did Trump Impose on EU?

Last week, President Trump announced a 20% tariff on European goods, further intensifying his protectionist trade stance.

The new tariffs, set to take effect on April 9, target key European exports such as automobiles and machinery.

Donald Trump justified the imposition of tariffs by accusing the EU of unfair trade practices, claiming that European nations restrict imports of American cars and agricultural products.

US-EU Trade in Numbers

The transatlantic trade relationship is one of the most significant globally, with annual trade in goods and services exceeding €1 trillion. However, the United States recorded a goods trade deficit of $235.6 billion with the EU in 2024, according to data from the US Trade Representative’s office.

Donald Trump has argued that trade deficit could be addressed if European countries committed to purchasing American energy products. The US president suggested that such an agreement would need to be worth $350 billion—far exceeding the actual deficit—to resolve the issue.

European exports to the US are dominated by sectors such as machinery, vehicles, and chemicals, which accounted for nearly 68% of total exports last year. Analysts warn that these industries could face severe disruptions if tariffs escalate further.

European Stock Markets: FTSE, DAX on April 7

The announcement of new US tariffs by Donald Trump sent shockwaves through European financial markets on Monday. Germany's DAX index recorded losses of 5 per cent while France's CAC 40 dropped by 1.8%. The FTSE 100 index plummeted by as much as 5% at the opening, eventually closing down by 3.8%, reaching its lowest level in nearly 14 months.

Economists have warned that continued escalation could push Europe’s already fragile economy closer to recession.

‘Black Monday’ Market Carnage

On April 7, global stock markets experienced a sharp downturn, with analysts dubbing the day "Black Monday" due to fears of disrupted trade flows and rising inflation triggered by President Donald Trump’s aggressive tariff policies.

In US, the S&P 500 fell by 1.9%, while the Dow Jones Industrial Average dropped by over 600 points during intraday trading.

In India, stock markets witnessed their worst trading day in ten months. The BSE Sensex plummeted by over 2,200 points to close at 73,137.90, while the NSE Nifty 50 tumbled by nearly 750 points to 22,161.60.

The India VIX, a measure of market volatility, surged by nearly 65% as investors dumped riskier assets amid growing fears of a global recession. Foreign institutional investors offloaded Indian stocks worth $1.05 billion, marking one of the largest daily outflows in recent times.