Portuguese PM relies on “dialogue” to dissuade Trump from applying “excessive tariffs” against EU

After Donald Trump fired the first shot in an unpredictable trade war with his main commercial partners, the Portuguese prime minister said on Monday that “Europe is prepared” if the U.S. President carries out his threat to also apply new tariffs on imports from the European Union (EU). However, Luís Montenegro is confident that “dialogue” and “argumentation” will be able to dissuade the White House leader from more extreme tariff intentions.

“It’s important that Europe sees this scenario from a perspective of dialogue. The U.S. is a leading trade and political partner for the EU. There’s no reason why we shouldn’t be able to demonstrate, with arguments, the virtues of having trade that isn’t marked by an excessive tariff burden“, he said in Brussels, where he is attending an informal meeting of European leaders — organized by the president of the European Council, António Costa — to discuss greater investment in Defence.

Stressing that Trump’s threats “are being taken seriously” in Europe, Luís Montenegro insisted: “My conviction is that political dialogue must be the key to being able to have economic conditions, to have good growth rates, both in the US and in Europe.”

Portugal’s prime minister warned, however, that one consequence of this trade war will be an increase in prices that the Americans themselves will not escape. “You don’t have to be a Nobel laureate in economics to realise that increasing tariffs on products that contribute to price formation on the side of U.S. industries will lead to a rise in prices”, he said, pointing out that “this has already happened” in Trump’s first administration, when tariffs on Chinese products “ended up resulting in an increase in the prices of American products themselves”.

“The increase in tariffs that the U.S. administration has been announcing does not favour the U.S. economy itself, but that is a decision that falls to the administration and that we have to respect”, Montenegro admitted. The “excessive tariff burden” on products imported from the EU will not be “very auspicious for the consolidation of lasting economic growth cycles”, either in the U.S. or in Europe, he added.