Nick Marsh
Business reporter

The United States runs a
trade deficit with the European Union, which means it imports more from
European countries than it sells to them.

Last year, the US ran a
deficit of $213bn (£173bn) – which President Trump has just described as “an
atrocity”. To redress the balance, he says that tariffs on EU goods will
“definitely happen”. The president argues that the border taxes will
help protect American jobs and products domestically.

Among the top European
exports to America are pharmaceuticals, cars and other types of advanced
machinery. The United States, meanwhile, sells oil, gas and financial services
to Europe.

Different countries will
be affected in different ways by US tariffs. Ireland, for example, is by far
the most reliant on the American market – nearly half of its exports outside
the EU are destined for the US.

Countries that buy a lot from the US include
the Netherlands and Germany – although the latter exports a huge volume of cars
in return.

Even so, the EU says it
will act as a collective and “respond firmly”, if and when tariffs come in. That probably means retaliatory taxes.

When it comes to the UK,
things are slightly different. The US doesn’t run as high a trade deficit with
Britain – in fact at one point last year it ran a surplus – and government
ministers hope that this will persuade the president to spare the UK from
tariffs.

As President Trump put
it, the UK is “out of line” but the EU is “really out of line”.