EU countries want to respond "in a balanced way" to Trump's tariffs.
On the other hand, the EU is expected to approve its first retaliation package targeting approximately $28 billion worth of US imports, ranging from dental floss to diamonds, in response to Trump's steel and aluminum tariffs this week.
During a meeting on Monday, EU ministers largely agreed to prioritize negotiations regarding the customs duties imposed by US President Donald Trump. However, on the other hand, the EU has also begun preparing a 'targeted' retaliation package against these tariffs. Under the framework of Trump's trade policy, which claims that they impose high barriers on US imports, the 27-member EU bloc is facing import duties of up to 25% on steel and aluminum and 25% on cars. Additionally, 'reciprocal' customs duties of 20% on nearly all products will come into effect on Wednesday.
Trade ministers from the EU gathered in Luxembourg on Monday to discuss how to respond to this situation, and relations with China were also brought up. Most ministers stated that the priority should be to initiate negotiations to avoid a direct trade war. Dutch Trade Minister Reinette Klever told reporters, "We must remain calm and respond in a way that reduces tensions. What we see in the stock markets right now is a precursor to what will happen if things escalate. But if necessary, we are ready to retaliate to bring the Americans to the table," she said. European Commission President Ursula von der Leyen stated at a press conference in Brussels that they are ready to negotiate a 'zero for zero' customs tariff agreement for industrial products. However, it has been reported that negotiations with Washington have been challenging thus far. EU Trade Commissioner Maros Sefcovic described his two-hour meeting with US counterparts on Friday as 'frank' and stated that he described the tariffs as 'harmful and unjustified.'
The first retaliation package is coming. The EU is expected to approve its first retaliation package targeting approximately $28 billion worth of US imports, ranging from dental floss to diamonds, in response to Trump's steel and aluminum tariffs this week. However, even this step is problematic on its own: Trump has threatened to respond with a 200% customs duty on EU alcoholic beverages if the EU imposes a 50% tax on American bourbon whiskey. France and Italy, significant players in wine and spirits exports, are worried about this situation.
The EU is expected to prepare a more comprehensive retaliation package by the end of April. This package will be implemented in response to US tariffs on cars and other 'reciprocal' tariffs. However, when it comes to a trade war based on goods, Brussels has fewer cards compared to Washington. In 2024, US exports to the EU are expected to remain at 334 billion euros, while EU exports to the US will reach 532 billion euros.
French Trade Minister Laurent Saint-Martin stated that options like the 'Anti-Coercion Instrument' (ACI) should also be on the table. This tool allows the EU to target the US service sector or restrict American companies' access to public tenders in the EU. Saint-Martin said, "We should not exclude any options, regardless of whether they are goods or services. We should also activate this comprehensive and potentially aggressive tool that Europe has when necessary." However, some officials argued for caution. Irish Foreign Minister Simon Harris, whose country's exports go to the US by nearly a third, labeled the ACI tool as a 'nuclear option' and said there is a general consensus that this option should not be used across the EU for the time being.
German Economy Minister Robert Habeck emphasized that the EU is in a strong position as long as it remains united, stating that his party (the Greens) will not be part of the new government. Speaking at the meeting in Luxembourg, Habeck said, "The stock markets are already collapsing; the damage may grow even more... America is currently in a weak position," noting that Elon Musk's hope for zero customs tariffs between Europe and the US demonstrates this situation. However, Habeck continued with this warning: "If every EU country starts to say, 'We have a problem with our red wine, we have a problem with whiskey,' we will end up with nothing."