Elon Musk says he hopes for 'free trade zone' between Europe and the US

US President Donald Trump's billionaire advisor Elon Musk said on Saturday he hopes in the US and Europe could eventually establish “a very close, stronger partnership” and reach a “zero-tariff zone situation.”

Musk was speaking via video link the party congress of Italian far-right party League, which is in a ruling coalition led by Premier Giorgia Meloni.

"I hope it is agreed that both Europe and the United States should move, ideally, in my view, to a zero-tariff situation, effectively creating a free trade zone between Europe and North America," Musk told Matteo Salvini, the LEGA party leader, via video conference.

Musk also said that the agreement should include the free movement of people between both regions, and that this was his advice to president Trump.

"That's what I hope occurs. And, also, more freedom for people to move between Europe and North America if they wish, if they wish to work in Europe or wish to work in America. They should be allowed to do so, in my view. So , that has certainly been my advice to the president."

Musk, who owns Tesla, SpaceX, and the social media platform X, has played a key role in US government downsizing as the head of the newly created Department of Government Efficiency.

Musk's comments come amidst trade war

Musk's comments were in stark contrast to the sweeping tariffs announced last week by Trump, which include a minimum 10% tariff on imports to the US and 20% on imports from the EU.

A close and powerful ally of Trump, Musk's comments notably came a day after China hit back at the US with 34% tariffs of its, which caused markets to slide by margins not seen since the COVID pandemic.

The tariffs imposed by China come into force on Saturday 10 April.

Trump was swift to criticise Beijing’s retaliatory move. “China played it wrong; they panicked -- the one thing they cannot afford to do,” he wrote in a social media post, adding, “My policies will never change. This is a great time to get rich.”

Last week, oil prices recorded their worst performance in months, and the US dollar plummeted following the announcement of the tariffs in what Trump called the US' "Liberation Day".

EU vows to defend interests

Meanwhile on Sunday, EU Commission president Ursula von der Leyen reiterated the EU's commitment to negotiating with the US, while also saying it will defend its interests through proportionate countermeasures if necessary. Von der Leyen's statement came after a phone call with the UK Prime Minister, Keir Starmer.

She expressed her deep concern over the tariffs announced by President Trump on 2 April and the harm they pose to all countries, both through their direct and indirect effects, including on the world's poorest nations.

Since being announced, the Trump administration's tariffs have sparked concern for global trade and economy, with countries taking different approaches as try to find the best way to deal with the potential disruption to trade and supply chains.

The policy measures, which Trump vows will boost the American economy by bringing more investment and creating jobs, have drawn condemnation from leaders of the affected nations.

Economists and analysts have also warned that the tariffs could lead to a contraction in global trade from disruption to supply chains, and may drive many countries into an economic recession, including the US.