The European Union decided on Thursday that it is delaying its planned retaliatory tariffs against the United States until mid-April in response to President Donald Trump’s 25% tariffs on EU steel and aluminum, which have fueled tensions between the two economic powers.
A spokesperson for the European Commission reportedly told CNBC that the EU is aligning the timing of its countermeasures against Trump’s tariffs. “This provides additional time for discussions with the U.S. administration,” they said. The EU is preparing to hit back with up to €26 billion ($28 billion) in tariffs on American goods.
EU plans massive tariffs on U.S. exports
The EU’s response is being carried out in two phases. First, it will reinstate previously suspended tariffs. Then, it will introduce new duties on additional U.S. products.
The list of targeted goods includes industrial-grade steel and aluminum, as well as semi-finished and finished metal products. Commercial derivatives like machinery parts and knitting needles are also on the table. The EU is expanding its list to bourbon, agricultural goods, textiles, leather products, and home appliances.
The European Commission has made it clear that these measures are meant to match the financial impact of the new U.S. tariffs. “The objective is to ensure that the total value of the EU measures corresponds to the increased value of trade impacted by the new U.S. tariffs,” the Commission said.
European Commission President Ursula von der Leyen defended the EU’s decision, saying that the bloc must “act to protect businesses and consumers” against Trump’s trade policies. She emphasized that the latest tariffs from Washington are broader than before, affecting a greater volume of European trade.
EU keeps negotiations open while preparing countermeasures
Trade Commissioner Maros Sefcovic confirmed that discussions with Trump’s administration are ongoing. He said that he has been directed by Von Der Leyen to keep the talks alive while the EU finalizes its response.
“I have been entrusted by President von der Leyen to continue talks to try to find a solution with the U.S.,” Sefcovic said during a speech at the European Parliament’s International Trade Committee. He added that the EU will remain flexible and assess U.S. actions on April 2 before determining its next move.
“On April 2, we will need to assess the action taken by the U.S. and keep a flexible approach so as to calibrate our response accordingly,” he said. Trump has already set that date as the deadline for new U.S. reciprocal tariffs on other countries.
EU locks U.S. out of €150 billion SAFE defense fund
As trade tensions escalate, the EU has also excluded the U.S. from its €150 billion ($163 billion) Security Action for Europe (SAFE) fund, a massive financing package aimed at boosting Europe’s military independence. The decision cuts off Washington as the EU seeks to reduce reliance on U.S. weapons.
SAFE is part of the Readiness 2030 strategy and is designed to funnel money into European defense industries. According to an EU statement, the fund will raise capital through markets and distribute it as loans to EU member states for defense procurement. “SAFE will allow Member States to immediately and massively scale up their defense investments through common procurement from the European defense industry,” the statement read.
The fund is only open to EU nations, Ukraine, and EFTA countries like Iceland, Liechtenstein, Norway, and Switzerland. Britain has also been excluded alongside the United States.
Kaja Kallas, Vice President of the European Commission, suggested that Europe cannot afford to rely on foreign weapons systems. “What we see … with Ukraine, if they use weapons that are not produced in Ukraine, there are sometimes limitations on how you can use those weapons,” she said at a press conference in Brussels. European leaders have also questioned the operational independence of U.S. military equipment, including Lockheed Martin’s F-35 fighter jets.
SAFE is part of the broader €800 billion ReArm Europe package, which the EU plans to implement over four years. The plan includes a defense budget escape clause, allowing EU countries to increase military spending up to 1.5% of GDP without breaking EU deficit rules.
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