This move by Trump has created a situation of heightened tension between Europe and the United States. Europe and the United States are presently the biggest trading partners in the world. In turn, Europe’s export items include machinery, auto parts, chemicals, and pharmaceutical products to the United States in return. Similarly, US-based companies may also struggle with higher costs in Europe, which could result in a decline in their exports. Some effects on the US economy are as follows:- Due to tariffs the cost of European imports increases.

Source: dna January 18, 2026 18:13 UTC