April 18 2025 - 7:00am
Expectations were high for yesterday’s meeting between Trump and Italian prime minister Giorgia Meloni — the first European leader to meet the US president since he announced a 20% tariff on all EU goods last week, subsequently paused and reduced to 10% for 90 days. Meloni’s visit was widely seen as a strategic move to leverage her ideological alignment and personal rapport with Trump, whom she met at Mar-a-Lago and whose inauguration she attended as the only EU leader present. Her goal was clear: to convince Trump to rethink his tariff stance concerning the EU — or at least Italy.
With a trade surplus of nearly €40 billion, Italy ranks as the third-largest EU exporter to the US, behind only Germany and Ireland. As such, it stands to be among the hardest hit by Trump’s proposed tariffs. Earlier this month, Meloni expressed harsh criticism of Trump’s tariff policy, saying his decision to impose 20% tariffs on the EU was “absolutely wrong” and that it would end up damaging the EU “as much as the US”.
Meloni was hoping to convince Trump of the merits of a “zero-for-zero” tariffs deal for the entire EU, but this did not come to fruition. Aside from Trump paying lip service to the fact that he “fully expects” to reach a trade deal with the EU, Meloni came home empty-handed. And that is arguably because, for all the economic and geopolitical shortfalls of Trump’s tariff-driven approach to reindustrialization, if there is a region of the world that truly deserves higher tariffs, that is the EU — and Trump knows it.
Over the past two decades — and especially in the aftermath of the 2010–2011 eurozone crisis — the European Union, despite being one of the wealthiest economic blocs in the world, has systematically suppressed domestic demand through policies of austerity, fiscal restraint and wage compression. This self-imposed deflationary trajectory (which further exacerbated the euro’s inherent deflationary bias) has not been accidental, but rather a deliberate strategy aimed at bolstering price competitiveness on the global stage, while at the same time reducing imports.
In effect, the EU has embraced a hyper-mercantilist, export-driven growth model, prioritizing trade surpluses over internal economic development. This approach has come at the expense of both its own citizens, who face stagnating wages and underfunded public services, and its trading partners — most notably the United States — who have absorbed the EU’s export surpluses as part of an increasingly unbalanced global economic relationship. In 2023, Italy’s export share of GDP was 33.7%, France’s 34.2%, while Germany’s was a staggering 43.4%. These are not normal figures. By way of comparison, China — long considered the export-led economy par excellence — only relies on exports for 19% of its GDP growth.
The reality is that long-running large trade surpluses do not indicate a successful economy. Quite the contrary. The EU has always been an exporting powerhouse precisely because of its sagging economy, caused by a lack of domestic consumption and investment.
The US has been voicing its concern about the EU’s beggar-thy-neighbor mercantilist policies for well before Trump even appeared on the political scene. More than a decade ago, the US Treasury Department lambasted European authorities for dragging down the world economy. “Europe’s overall adjustment is essentially premised on demand emanating from outside of Europe rather than addressing the shortfalls in demand that exist within Europe,” they wrote. Since then, nothing has changed. Trump’s trade war has therefore been a long time coming.
In this sense, his tariffs should be seen not merely as a provocation, but as an opportunity for Europeans to finally confront the deep flaws of the EU’s export-led economic model — a reckoning that is long overdue. Yet instead of sparking a serious debate, the only responses European leaders have mustered are either to lament the injustice of the tariffs — or, like Giorgia Meloni, to plead with Trump for exemptions. That this is the extent of Europe’s reaction speaks volumes about the continent’s political decline — a spectacle of impotence masquerading as diplomacy.
Thomas Fazi is an UnHerd columnist and translator. His latest book is The Covid Consensus, co-authored with Toby Green.
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