European Union targets an additional $113B US goods with retaliatory taxes

The European Union plans to impose additional tariffs on about $113 billion in US goods should negotiations with President Trump prove unsuccessful.

The US placed a 25% tariff on all steel, aluminum, and cars from Europe, plus a 10% tariff for almost all European goods, which could rise to 20% once President Trump’s 90-day pause ends on July 8.

The European Union vows to reject unfair trade deals with the U.S.

On Tuesday, the European Union clarified that they will not bow down to pressures and accept an unfair tariff agreement with the United States. 

European Trade Commissioner Maros Sefcovic argued that the commission is not “weak” and thus will not agree to any unfair deal.

He added that they plan to use the pause period to come up with more rebalancing measures. He also insisted that the US needs to show that it’s prepared to come to an objective deal.

He commented, “All options remain on the table here […]. While the EU’s clear preference was to negotiate a solution with the United States, he said Washington now needed to show its readiness to make progress towards a fair and balanced agreement.”

Nonetheless, he agrees that US import levies are unwarranted and will only cause economic harm to both sides of the Atlantic. 

The European Union clarified that current US tariffs affect 70% of its exports to the United States and believes it could easily increase to 97%, roughly €549 billion, after further US investigations into pharmaceuticals, semiconductors, and other products.

EU to share retaliatory measures with member states by Wednesday

The European Union is considering imposing additional tariffs of about €100 billion, or about $113 billion, if negotiations with the US fail. The bloc had made it clear that it does not want tit-for-tat tariffs, but if talks yield no results, it aims to maximize the pain for the US with new levies while ensuring their supply chains are least affected.

According to people familiar with the matter, the commission should disclose the proposed retaliatory measures to member states as early as Wednesday, followed by a month-long consultation period before final approval.

The European Commission, the agency’s executive branch dealing with trade, is also set to share a paper with the US to try to start negotiations, which some have precluded to detail reduced trade and non-tariff barriers and increased investments in the US.

The EU had previously extended an offer to scrap all duties on industrial goods, such as cars, but the U.S. rejected it. 

Additionally, the European Union proposed increasing imports of American liquefied natural gas and soybeans—measures that had helped calm trade disputes during Trump’s first term.

However, the US seems more interested in the EU’s taxes on tech companies and its value-added tax rather than engaging with the bloc’s proposals. The agency has so far declined to discuss its tech levies and even claimed that its VAT is a fair and non-discriminatory tax that applies equally to domestic and imported goods.

Earlier, in its first list of retaliatory measures, the EU had targeted politically sensitive constituencies in the US and included goods such as soybeans from Louisiana. The European Union could still include some of those measures in its new list.