On January 19, economist Oleh Pendzin appeared on the Veza Public Analytics Center to discuss Donald Trump’s renewed rhetoric on tariff pressure against NATO allies and the European Union. Trump threatened new tariffs of 10%—rising to 25%—for countries unwilling to “give up” Greenland to the US, prompting an EU response: a counter-tariff package affecting $93 billion worth of American goods.
Pendzin explains that annual US-EU trade turnover exceeds $1 trillion, with Europe holding a significant positive balance. Trump seeks to redress this via increased American exports—especially agricultural goods and energy supplies—though these face resistance from European producers.
The imposition of further tariffs by Trump threatens European exports and could seriously impact both economies. The European response goes beyond tariffs, potentially restricting US investment and business operations. For the US, such measures would mean higher prices and greater inflationary pressure ahead of the presidential election.
Pendzin sees the trade war as a means of political, rather than economic, leverage, arguing that aggressive actions among NATO partners undermine the bloc’s credibility and benefit its adversaries. He emphasizes that duty-free trade deals being discussed between Ukraine and the US are unlikely to bring significant economic benefit due to the small scale of bilateral trade.
Pendzin concludes by advising Ukrainians to think critically about political announcements and avoid overestimating their practical impact. While agreements with Trump may not be harmful, they are also unlikely to deliver rapid benefits. According to Pendzin, current negotiations in Davos and the large sums mentioned as aid for Ukraine are more political signals than real financial resources.
