Would Donald Trump’s trade tariffs hurt Europe?

Donald Trump has a trade trick up his sleeve that he insists he’s not afraid to use if re-elected in November: a universal tariff of up to 20% on all foreign-imported products.

“Outside of love and religion, it's the most beautiful word there is: tariff,” Trump told a North Carolina rally on Monday.

A tariff is a tax levied on foreign goods as they enter a country, with the domestic importer expected to foot the bill, at least on paper.

Trump has threatened to levy a 60% duty on Chinese products and up to 200% on cars produced in bordering Mexico.

The Republican hopeful is counting on the trade tool to propel homegrown US businesses, create jobs and shrink the federal deficit through extra tax revenues.

But his critics at home are warning that the economic burden of such tariffs could be passed on to American consumers, while allies abroad — including in Europe — fear the collateral damage of Trump’s tariffs could be devastating.

The EU-US trading relationship is the most valuable in the world, worth around €1 trillion in goods and services annually. 

The EU benefits most from trade in goods, posting a surplus of €156 billion last year alone, against a deficit in services of €104 billion.

A blanket tariff of 10% or 20% would make it more expensive for American companies to import EU goods, meaning EU exports across the Atlantic could plunge by as much as a third in some sectors, according to the most radical economic estimates.

Sectors such as machinery, vehicles and chemicals — which together made up 68% of EU exports to the US last year — would be hardest hit.

It would make Germany, the European bloc’s economic powerhouse, especially vulnerable to shocks, given its reliance on US exports in these sectors.

While economists