EU pursues trade agreement with Trump, readies countermeasures if needed
**EU Readies Substantial Retaliatory Tariffs as U.S. Trade War Escalates**
The European Union (EU) has prepared retaliatory tariffs on approximately €72 billion ($84 billion) worth of U.S. goods, targeting a broad range of important American exports, as tensions between the two trading blocs continue to rise.
The countermeasures, initially prepared in response to U.S. tariffs on EU goods, including a 20% "reciprocal" tariff on EU goods and a 25% tariff on autos and auto parts, have been in the works since May. However, the situation took a turn for the worse when U.S. President Donald Trump announced a 30% tariff on EU goods in a letter to European Commission President Ursula von der Leyen on July 11, 2025.
The EU has set a deadline of August 1, 2025, to potentially implement these retaliatory tariffs but has indicated it will delay taking action until that date, keeping the door open to impose them if necessary. The EU's willingness to respond firmly to the U.S. tariffs was emphasized by President von der Leyen, who highlighted the negative impacts of U.S. tariffs on transatlantic supply chains.
EU leaders are also exploring additional measures such as using the EU’s anti-coercion mechanism to tax U.S. tech giants as part of their response strategy. The U.S. President has expressed that the 30% tariffs will not apply if EU companies manufacture in the U.S. Additionally, he warned that any EU retaliation tariffs will be added on top of the 30% U.S. tariffs.
The EU has been conducting consultations on possible countermeasures, reviewing products covering up to €95 billion in U.S. imports, including aircraft, automobiles, medical devices, IT equipment, and industrial machinery. These consultations indicate a comprehensive and prepared EU response if negotiations fail.
So far, the U.S. has only unveiled two pacts, with Britain and Vietnam, alongside temporarily lower tit-for-tat duties with China. In contrast, the EU has been working diligently to prepare for potential retaliation, with Brussels having been working on the list of U.S. imports it could target since May.
The pharmaceutical industry in Ireland, along with industrial powerhouse Germany, is on the front line of Trump's trade war. Thomas Byrne, the minister for Ireland, called for Europe to "work our hardest" for a deal before August 1 to protect investments and jobs. Maros Sefcovic, the EU's trade chief, plans to speak with US counterparts to try to get negotiations back on track.
The EU's unified position when negotiating with Washington has been evident, with Denmark's foreign minister, Lars Lokke Rasmussen, stating that there was a unified position among the ministers to be ready to respond if needed. France's trade minister, Laurent Saint-Martin, suggested that retaliation plans should be drawn up with "no taboos."
The recent setback requires a rethink of the bloc's tactics, according to Saint-Martin. EU nations have sought to maintain a unified position when negotiating with Washington, but the escalating trade war between the two superpowers has put pressure on the bloc to respond forcefully.
As the deadline approaches, both sides have warned of tariff escalations that could begin in early August if no deal is reached. The EU has made it clear that it is prepared to retaliate if necessary, with a substantial list of U.S. goods valued at about €72 billion on standby. The situation remains tense, and only time will tell if a deal can be reached before the deadline.
- In response to the escalating trade war between the EU and the U.S., the European Union is prepared to impose retaliatory tariffs on a broad range of American exports, including general-news items such as autos, auto parts, and industrial machinery.
- As part of its strategy to counter the U.S.'s tariffs, the EU is considering employing the EU’s anti-coercion mechanism to tax American tech giants, in addition to the substantial retaliatory tariffs on approximately €72 billion worth of U.S. goods across various sectors, like general-news worthy areas such as pharmaceuticals and heavy industry.
