The EU has already devised retaliatory measures in response to Trump's imposed tariffs.
In the ongoing trade dispute with the USA, the EU Commission is doling out stern countermeasures while keeping the door open for negotiations. This time around, retaliatory tariffs could potentially double their previous levels in the last trade squabble with Washington. Simultaneously, a mutually agreeable solution seems to be taking shape.
Speaking on the issue, EU President Ursula von der Leyen expressed her disappointment over the U.S.'s decision to impose tariffs on European steel and aluminum exports. Von der Leyen warned of "determined and proportionate countermeasures" in response, without immediately disclosing the specifics. Reports suggest that the Commission already has an answer prepared, drawing inspiration from the trade spat between the EU and the U.S. during Trump's first term in 2018. The retaliatory tariffs imposed then were suspended, but not permanently lifted, with the automatic expiration date set for the end of March unless extended as part of a deal with the U.S. government.
If the situation remains unresolved, the EU may target symbolic U.S. exports like Harley-Davidson motorcycles, bourbon whiskey, and motorboats. In contrast to 2018, the EU would counter with a double tariff, charging 50% instead of 25%. This would result in retaliatory tariffs ranging between 4.4% and 50% on products such as steel, aluminum, jeans, and orange juice.
The EU Commission possesses the power to implement these tariffs without further approval from other EU bodies or member states. According to the chairman of the European Parliament's trade committee, Bernd Lange, these measures can be quickly and easily reactivated using a Commission implementing act.
Despite the looming threat of escalation, both sides seem ready to negotiate. Possible solutions include the EU increasing LNG and military equipment imports from the U.S. and potentially reducing import tariffs for American cars, among other possibilities.
Sources:1. EU Commission Press Release2. Distilled Spirits Council of the United States (DISCUS)3. Handelsblatt4. European Parliament's trade committee
Enrichment Data:- In 2018, the EU imposed a 25% retaliatory tariff on American whiskeys, such as bourbon, due to U.S. tariffs on steel and aluminum imports. This move significantly impacted American whiskey exports to the EU, causing them to decline by 20% from $552 million in 2018 to about $440 million in 2021, according to the Distilled Spirits Council of the United States (DISCUS) 2.- The EU has also indicated that it is prepared to reimpose a 50% tariff on American whiskeys if the trade dispute over steel and aluminum is not resolved by the end of March 2025 2.- If the U.S. tariffs on steel and aluminum continue or escalate, the EU might reassess its trade stance and implement additional retaliatory measures, although specific details on other products or tariffs are not provided in the sources.
The following paragraphs shall apply: In line with the EU Commission's preparations, the aforementioned stern countermeasures refer to the potential reimposition of a 50% tariff on American whiskeys, as was done in 2018. This implies that retaliatory measures, as stated earlier, are not limited to doubling the previous tariff levels but can extend to higher rates if necessary.
