A 3D‑printed miniature model of U.S. President Donald Trump, EU and Greenland flags, and the word "Tariffs" appear in this illustration taken January 17, 2026. REUTERS

If the US and the EU implement tariff barriers against each other, it could cause severe disruptions to global trade, as both are crucial players in the global supply chain and major consumer markets, say economic analysts.

Tensions are escalating after US President Donald Trump threatened to impose tariffs ranging up to 25% on eight European allies that oppose his demands for control of Greenland.

Trump said 10% tariffs will be applied to imports from the UK, Denmark, Norway, Sweden, France, Germany, the Netherlands and Finland. He said the tariffs will be raised to 25% in June if Denmark does not agree to sell Greenland to the US by June 1.

Meanwhile, the EU is considering imposing retaliatory tariffs on US goods worth US$93 billion if Trump imposes tariffs as threatened.

The EU is also mulling its anti-coercion instrument, also known as the "trade bazooka", which would allow the bloc to block US access to economic benefits.

Aat Pisanwanich, an economic analyst at Intelligence Research Consultant Co Ltd, said if both these huge markets impose trade barriers on each other, it would significantly affect the global market.

"When the EU faces obstacles in exporting its goods to the US, it will affect Thai exports to the EU too. The EU is likely to redirect its goods to other markets across the world," he said.

Mr Aat noted the influx of Chinese goods into the global market following the trade war between the US and China. Similarly, this emerging conflict between the US and the EU could result in increased flows of Chinese, American and European products into the global market as trade barriers among them arise.

He said Thai goods involved in the production supply chain in the EU, such as auto parts, electrical appliances and rubber, would be negatively affected by this tension.

Meanwhile, Thai exports of fruit, rice and seafood are expected to decrease due to reduced purchasing power in the EU.

"Thailand should accelerate negotiations and finalise a free trade agreement with the EU. It may also be advantageous for Thailand to pursue trade agreements with the EU through blocs such as Asean and Asean+3, which includes China, Japan and South Korea," said Mr Aat.

EXPECTED WINDFALL

Asia Plus Securities (ASPS) said there is a possibility Thailand might reap a windfall from the US-EU conflict, especially if the situation escalates until both sides stop trading with each other.

"Such tension may create a rift between the US and NATO alliance," the brokerage noted.

Trade with the EU makes up 18% of total US trade, while trade with the US comprises 7% of the EU’s total trade. EU goods account for 20.2% of imports into the US.

The threatened tariffs would cause the prices of goods, such as electronic parts, automobiles, medicine and oil, to rise sharply, making it harder to reduce US inflation from its present level of 2.7%, while also adversely affecting global GDP, said ASPS.

However, the brokerage believes the conflict between the US and Europe may benefit Thailand.

The US makes up $83 billion, or 12.9%, of Thailand’s total trade, while the EU accounts for $49 billion, or 7.63%. Together, the two markets account for roughly $132 billion, or 20.5% of Thailand’s overseas trade, exceeding the contribution from China, Thailand’s largest trading partner.

"The US and EU may stop trading with each other and import Thai goods instead, benefiting Thai shipments. Companies from both regions may also invest in production bases in Thailand, which is a neutral ground," noted ASPS.

If the conflict escalates to become a trade war, goods from affected countries in Europe may become more expensive in the US, and US goods may have more limited access in these European markets. This may cause both regions to import from exporters that face lower tariffs, said the brokerage.

Thailand could attract greater foreign direct investment as it has good trade relationships with both the US and EU, while Thailand still has growth potential and much lower cost, noted ASPS.

"Thailand is a production base for industrial goods, notably electronic parts, vehicles and processed food. There are possibilities that both the US and Europe may increase imports from Thai manufacturers," said the brokerage.

While conflicts between the US and South America, the Middle East and Europe hurt risk assets, including equities, fund flows may switch to markets with less uncertainties, including Asian stock markets, such as the Stock Exchange of Thailand.

ASPS said this shift would have positive sentiment for industrial estates, such as WHA Corporation (WHA) and Amata Corporation (AMATA); electronics and auto parts manufacturers, including Delta Electronics Thailand (DELTA), Somboon Advance Technology (SAT), and AAPICO (AH); and processed food companies, namely Charoen Pokphand Foods (CPF), Thai Union Group (TU) and Thaifoods Group (TFG).