Luxembourg’s Minister for Foreign Trade, Xavier Bettel, expressed regret on Thursday over the need for European retaliatory measures following US President Donald Trump’s announcement of sweeping new tariffs targeting nearly every country.
Bettel, who also serves as Deputy Prime Minister, warned that trade restrictions typically result in a “lose-lose” scenario. “Many Americans voted for presidential candidate Trump because he said that inflation would go down,” he said, but Bettel finds it “hard to see how these measures will achieve that”. He argued that consumers on both sides of the Atlantic would ultimately bear the cost of what he called “poor political decisions”.
The minister noted that the EU had previously taken a pragmatic approach, allowing time for dialogue before resorting to countermeasures. “But it seems that the Americans couldn’t have cared less about that”, Bettel said.
He also cautioned that the tariffs could disrupt global supply chains, prompting companies to relocate production based on market access rather than efficiency. “Some companies producing in Europe or Asia for the US market may shift operations to the US – and vice versa,” he explained. For this reason, Bettel believes that the Trump administration’s gambit will not pay off in the end. Bettel sees a risk that a lot of money will be “thrown out of the window” over the next months and years as businesses constantly adapt to shifting trade barriers.
The European Commission is currently drafting retaliatory measures, which will later be submitted to member states for approval.
Bettel emphasised that any EU response must be strategically targeted. If the US tries to attack Europe, “the commission will have to know […] where to hurt them in return,” he said. Still, he lamented the escalation: “I think it’s a shame that it has come to this. Honestly, this is not in the interest of the economy, the world economy, and also global predictability.”
In his first public response to the new US tariff policy, Luxembourg Prime Minister Luc Frieden described import duties as “an obstacle” to global commerce that typically represent “a bad idea”. The comments came during an interview with our colleagues from RTL.lu on Thursday.
Frieden reiterated Luxembourg’s preference for diplomatic engagement with the United States – Europe’s largest trading partner – over an all-out trade war, noting recent consultations with European Commission President Ursula von der Leyen last weekend.
The Prime Minister emphasised the need for coordinated European action, saying: “What’s crucial now is that EU member states maintain unity in our response.” When pressed about potential domestic consequences, Frieden acknowledged it remains “too early to assess” the tariffs’ impact on Luxembourg’s economy.
Anticipation over: Key details on Trump’s market-shaking tariffs
