BRUSSELS, Feb 3 (Reuters) - European leaders cautioned on Monday that U.S. President Donald Trump's threat to extend tariffs to the EU could trigger a trade war, potentially harming both economies on either side of the Atlantic.
European Union foreign policy chief Kaja Kallas pointed out that initiating a trade conflict between the U.S. and Europe would benefit China, stating, We are very interconnected. We rely on America, and America relies on us as well.
Addressing an informal gathering of EU leaders in Brussels, Kallas emphasized the importance of cooperation, given Trump's indication that the EU would be the next target following tariffs imposed on Mexico, Canada, and China.
Trump reiterated his intentions, citing perceived trade imbalances, stating, It will definitely happen with the European Union.
German Chancellor Olaf Scholz advocated for collaboration between the EU and the U.S., stressing the need to shape a cooperative future despite potential tariff challenges.
French central bank governor expressed concerns over the impact of tariffs on the automotive sector, highlighting that everyone stands to lose in a protectionist trade conflict.
Shares in European car manufacturers declined on Monday amid apprehensions regarding the consequences of potential tariffs.