The European Union’s response to three rounds of high US tariffs since President Donald Trump’s return to office has involved a careful balancing act.
The EU has carefully calibrated its retaliation while still pushing for negotiations to prevent a full-blown trade war.
In March, Trump launched his first salvo against the 27-nation EU with 25 per cent tariffs on steel and aluminium imports.
He followed that with a 25-per cent tariff on all foreign-made cars, which took effect last week. The most significant action came when Trump imposed a sweeping 20 per cent tariff on all other EU goods, part of a larger set of levies against numerous countries, including China, which came into force on Wednesday.
So far, the EU has been methodical, weighing its options before taking action. After the metals tariffs were imposed in March, the EU took a month to compile a list of US goods to target, including soybeans, cosmetics, and motorcycles, with a focus on states that are key to Trump’s Republican base.
The EU approved the list of more than 20 billion euros worth of US goods on Wednesday, with tariffs set to be implemented in May and December.
The bloc also reinstated levies from Trump’s first term that had been suspended, which will be collected starting Tuesday.
Next on the agenda will be the EU’s response to the 20 per cent import taxes on cars, which could be announced as early as next week.
France, along with Germany and Austria, has led the push to target US tech giants if talks fail.
France and Germany are also advocating for the EU to be ready to deploy its so-called trade “bazooka,” the anti-coercion tool, which allows the bloc to punish countries that use economic threats against it, giving the EU more power to restrict trade in services.
The EU’s ultimate goal is to reach a negotiated settlement. “Sooner or later, we’ll be sitting at the negotiating table,” said Maros Sefcovic, the EU’s trade chief, acknowledging that “engaging the US will take both time and effort.”
Sefcovic said that a quiet and unassuming figure has led the EU’s outreach efforts in search of a “mutually acceptable compromise.”
He has travelled to Washington twice, in February and March, and has held discussions with his US counterparts, including Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer.
EU President Ursula von der Leyen offered a glimpse into Europe’s proposals this week, revealing that the EU had offered Washington a bilateral tariff exemption for cars and other industrial goods. However, the response from the US was not favourable.
Privately, EU officials admit that progress has been limited in the talks with the US, with uncertainty around what Trump truly wants from the negotiations.
One issue may be that the EU is not talking to the right people, with Trump’s trade advisor, Peter Navarro, seen as a more influential figure than Lutnick or Greer, although he has not been part of the discussions.
Navarro, considered the architect of Trump’s trade offensive, has expressed frustration with the EU, targeting what the US sees as “non-tariff barriers” that he believes are unfair.
US officials have focused on the EU’s value-added tax (VAT), food safety and health regulations, and environmental standards.
He has also expressed dissatisfaction with the EU’s new tech laws, the Digital Markets Act and the Digital Services Act, arguing that they unfairly target US companies.
The EU has strongly pushed back on these claims. “We don’t share the US assessment of what constitutes a non-tariff barrier,” said EU spokesman Olof Gill.
He also clarified that EU tech regulations are “separate” from the tariff discussions, stating, “We will not be conflating the two in our negotiations with the US.”
The threat of further duties remains, with Trump reportedly eyeing the pharmaceutical sector, a key industry for the EU, particularly Ireland.
