Trade war escalation could affect Dutch economy
The ongoing trade dispute between the United States and its trading partners is intensifying as Mexico and Canada impose retaliatory tariffs. The European Union, including the Netherlands, is preparing for potential U.S. tariffs, which could impact Dutch businesses and consumers.
Klaas Knot, president of De Nederlandsche Bank, expressed concern over the potential impact. “This is a game where there are only losers,” he said on Buitenhof. “Global trade has brought us enormous prosperity, but consumers will ultimately pay the price.”
Higher tariffs could lead to rising inflation, making goods more expensive. A similar situation occurred during Trump’s first term when he imposed tariffs on washing machines in 2018.
Although the EU has not yet been directly affected, President Donald Trump has indicated that tariffs on European goods are coming. The Netherlands, as a major trading nation, could reportedly face economic consequences if tariffs are imposed on Dutch exports to the U.S.
“These tariffs function as an extra tax,” said Bert Colijn, chief economist at ING. “Companies will pass most of these costs on to consumers.”
Mexico has yet to announce its exact tariff rates, while Canada has confirmed a 25 percent increase on certain American imports. China is also expected to respond to the U.S. measures, which will take effect on Tuesday.
“In the first three months, there was no immediate effect because companies still had stock,” Colijn said. “But after that, prices rose significantly.”
Dollar vs. euro
The trade dispute could also strengthen the U.S. dollar against the euro. While this could make Dutch exports more attractive to American buyers, it also highlights the existing trade imbalance between the two regions. The Netherlands is a major exporter to the U.S., particularly in sectors such as technology, agriculture, and machinery.
“Americans simply buy a lot of products,” Colijn said. “Tariffs won’t change that much.”
The European Commission is reportedly preparing countermeasures if the U.S. imposes tariffs on European goods. During Trump’s first term, the EU responded with strong counter-tariffs on American products, and a similar reaction could follow.
The Dutch government is closely monitoring the situation, given the Netherlands' reliance on international trade. Talks between the EU and the U.S. are ongoing, with discussions about energy and defense agreements that could help ease trade tensions. However, a stronger European response is reportedly still possible. “No one benefits from a full-scale trade war,” Colijn said.
