European Union Set to Counteract US Tariffs with Targeted Measures
European Union countries are gearing up to present a united front against US President Donald Trump's proposed tariffs, with plans to approve a series of targeted countermeasures on approximately 28 billion euros worth of US imports, ranging from dental floss to diamonds. This decisive action would align the EU with China and Canada, both of whom have previously imposed retaliatory tariffs against the United States, raising concerns over an escalating global trade war that could lead to increased prices for billions of consumers and potential economic downturns worldwide.
The 27-nation bloc is currently facing 25% import tariffs on steel and aluminum as well as cars, with reciprocal tariffs of 20% across almost all other goods set to commence soon. Trump's tariffs impact roughly 70% of the EU's exports to the United States, valued at a total of 532 billion euros (approximately 585 billion dollars) in the previous year. Duties on a range of products, including copper, pharmaceuticals, semiconductors, and timber, are still anticipated.
The European Commission, which oversees EU trade policy, is expected to propose a specific list of US products targeted for additional duties as a countermeasure to Trump's tariffs imposed on steel and aluminum. The potential list may include US meat, cereals, wine, wood, clothing, and everyday items like chewing gum, dental floss, vacuum cleaners, and toilet paper.
A particularly contentious product in the ongoing trade discussions is bourbon. The Commission has suggested imposing a 50% tariff on this American spirit, which has prompted President Trump to threaten retaliatory tariffs of up to 200% on EU alcoholic drinks if the EU follows through with its plan. France and Italy, both major wine exporters, have expressed concern over potential fallout from these tariffs.
The EU, whose economy heavily hinges on free trade, is keen on ensuring broad support for its response to the US tariffs. A meeting scheduled for Monday in Luxembourg will bring together trade ministers from the 27 EU member nations, marking the first EU-wide political gathering since the announcement of the US tariffs. The primary objective of the meeting is to present a united stance advocating for negotiations with the United States for tariff removal, while simultaneously preparing countermeasures should negotiations fail.
One EU diplomat noted that, despite concerns about previous uncertainties surrounding Brexit and its effects on EU unity, there is currently a significant interest among member nations in maintaining a cohesive commercial policy in the face of US tariffs. The diverse opinions among EU nations present a balancing act— aiming for a response that is firm enough to encourage negotiation but not so aggressive as to lead to further escalation of trade tensions.
France advocates for a comprehensive package of measures beyond mere tariffs, with President Emmanuel Macron even suggesting that European companies should halt investments in the United States until clarity is achieved. In contrast, Ireland, which relies heavily on US trade, is calling for a more measured response, while Italy has raised questions about the necessity of retaliating at all.
As talks with US officials have so far proven unproductive, EU trade chief Maros Sefcovic has described his recent discussions as 'frank,' emphasizing that the US tariffs are both damaging and unjustified.
The first round of proposed EU countertariffs is set to be put to a vote on Wednesday, with expectations for approval as long as a majority of 15 member states, representing 65% of the EU's population, do not oppose them. The implementation of these countermeasures would occur in two phases: a smaller portion set to take effect on April 15 and the remainder following a month later.
To further understand the implications of these tariffs, Commission President Ursula von der Leyen will also meet separately on Monday and Tuesday with leaders from the steel, automotive, and pharmaceutical sectors to assess the tariffs’ impact and strategize subsequent actions.
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