EU targeting Elon Musk. Revenge for Trump’s Tariffs?

The EU is preparing a fine of EUR 1 billion to charge on Elon Musk’s companies, notably X.

Of course, officially the EU is not targeting Musk because of the 20% tariffs Trump is charging on EU products.

No, officially not. But unofficially many voices are heard saying that the timing of the 1 billion fine against Musk is in relation to Donald Trump’s tariffs against the EU.

It becomes clear that the EU in its regularity arsenal has not only the customs and tariffs weapons but many other rules and regulations and can punish harshly economic actors that displease the EU.

Musk is an important advisor of Trump and political actor in the US with a worldwide influence. His media companies have global reach and are feared by all politicians. As such Musk is perfectly a target for the EU.

Europe is in a difficult situation today. Ideologically, most of the EU leaders are far away from the new reactionary political developments in the US. The Obama/Biden era is definitely over, the US Democrats are in a state of infight and dissolution. Their political ideas but also their trade policies are reversed. What was the neo-liberal globalization of trade becomes a protectionist tariff policy.

Of course, even the Democrats cannot otherwise than admit that the enormous deficit spending, the Green Deal of Biden, the open border policy, also the economic open border and the resulting trade deficits are harmful to the US economy. This needed to stop, economists warned of disasters. Economists also warned that other nations were unfairly exploiting the economic open border policy of the US. It is common sense that this spiraling deficits were unsustainable and needed corrections.

Of course, there are some other ways to introduce corrections to a degradation of the economy. Reducing taxes, reducing expenses, currency and interest shifts are usual instruments. Tariffs can be felt as and increase of consumer taxes, but also can be a regulatory instrument to prefer home made goods. On the other hand, tariffs may also increase inflation.

There will be an adaption cycle for the US and the World’s financial and economic system. The introduction of the new tariffs, at a base rate of 10%, are not really relevant for many countries, but targeting the main beneficiaries of the open border policies with tarifs of 30 or 40% will be a hammer for those profiteers.

Trump is open for discussions and the profiteers are invited to come to the negotiation table. This will generate good news and the stock exchange will surge again. For sure.