The European Union said yesterday that it would start levying retaliatory tariffs on certain US goods from next week, after EU trade ministers agreed to prefer negotiations to lift the levies imposed by President Donald Trump rather than retaliate.
The 27-nation bloc faces import tariffs of 25% on steel, aluminum and cars, as well as "reciprocal" tariffs of 20% from Wednesday on almost all other goods, as part of Trump's policy targeting countries he says are raising high barriers to US exports.
Trade ministers met in Luxembourg yesterday to discuss the EU's response, as well as relations with China. Many stressed that the priority was to start negotiations and avoid an open trade war.
"We must remain calm and react in a way that will contribute to calming the situation. The stock markets are currently showing what will happen if we escalate immediately. But we will be ready to take countermeasures if necessary to bring the Americans to the negotiating table," said Dutch Trade Minister Reinet Klever.
European Commission President Ursula von der Leyen said at a press conference in Brussels that the EU is ready to negotiate an agreement on zero tariffs for industrial goods.
"Sooner or later, we will sit down at the negotiating table with the US and find a mutually acceptable compromise," EU Trade Commissioner Maroš Šefčovič said at a press conference.
Šefčovič said that talks with Washington were still at an early stage and that he had offered a "zero tariff" agreement for cars and other industrial products, expressing hope that negotiations could begin soon.
He also said that the EU will start levying the first round of targeted tariffs on US imports from April 15th, and the second from May 15th, in response to US tariffs on European steel and aluminium.
Ševčovič, as reported by Reuters, stressed that the EU's countermeasures, targeting a list of US imports in response to tariffs imposed by the Trump administration on steel and aluminium, will not exceed a value of 26 billion euros ($28,46 billion), after taking into account the objections of member states.
He also made it clear that while the EU prefers to negotiate a tariff reduction with the US, it is prepared to step up its response. This could include using the EU's Anti-Coercive Mechanism (ACI), which would allow the EU to target US services or restrict US companies' access to EU public tenders.
"While the EU remains open to negotiations - and strongly prefers them - we will not wait indefinitely," Šefčovič said, adding that the Union will continue to introduce countermeasures and take steps to prevent the market from being flooded with diverted imports.
"We are ready to use all tools to protect the single market," he said, echoing the views of French Trade Minister Laurent Saint-Martin.
However, some EU member states, particularly those heavily exposed to trade with the US, have urged caution. Irish Foreign Minister Simon Harris described the ACI as a “true nuclear option” and said he believed most EU members were not currently prepared to go down that path, at least not yet.
Outgoing German Economy Minister Robert Habek said the EU should be aware that it is in a strong position - provided it acts with one voice.
“Stock markets are already falling, and the damage could be even worse... America is in a position of weakness,” he said in Luxembourg. Habek added that Trump aide Elon Musk’s hope for zero tariffs between Europe and the US reflects that very fact.
However, Trump's top trade adviser yesterday rejected Musk's push for "zero tariffs" between the US and Europe, calling the Tesla CEO a "car assembler" who depends on parts from other countries, Reuters reported.
The EU is expected to approve an initial set of countermeasures this week on up to $28 billion worth of US imports, ranging from dental floss to diamonds, in response to Trump's steel and aluminium tariffs, rather than broader "reciprocal" levies.
But even that move has caused tensions, as Trump has threatened a 200% tariff on EU spirits if the bloc goes ahead with a planned 50% tariff on US bourbon. France and Italy, major exporters of wine and spirits, have expressed concern.
The 27-nation bloc is expected to present a broader package of countermeasures by the end of April in response to US auto tariffs and so-called reciprocal tariffs.
However, in a trade war of tariffs on goods, Brussels has less room to retaliate against Washington, given that the total value of American goods imported into the EU in 2024 was 334 billion euros, while EU exports to the US reached 532 billion euros.
Trump's plans to impose tariffs again rocked global markets yesterday, after he said foreign governments would have to pay "a lot of money" to have the levies lifted. US stocks briefly rose on hints of a possible pause, but quickly fell again.
Asian and European stock markets sank and oil prices fell sharply as investors feared that the tariffs, which Trump compared over the weekend to a "panacea," could lead to higher prices, weaker demand and a potential global recession.
US stocks briefly rose yesterday after CNBC reported that White House adviser Kevin Hassett said Trump was considering a 90-day pause in tariffs on all countries except China. However, stocks fell again after the same outlet reported that the White House called the statement “fake news.”
Trump showed no signs of easing his tariff policy on Monday - again calling on the US Federal Reserve to cut interest rates and sharply attacking China for imposing countermeasures.
Trump said he would impose additional tariffs of 50% on China if Beijing does not withdraw its countermeasures against the United States. "The additional tariffs of 50% will take effect on April 9th, if China does not withdraw the 34% tariffs by April 8th," the US president announced. "In addition, all discussions with China regarding their requests for meetings with us will be suspended! Negotiations with other countries, which have also requested meetings, will begin immediately," Trump said in a post on the Truth Social network.
Bonus video:
