EU signals tariffs on $95 Billion in U.S. Goods amid rising trade friction

In a significant escalation of transatlantic trade tensions, the European Union (EU) has warned of the possibility of imposing tariffs on approximately €95 billion worth of American exports. This announcement follows the implementation of U.S. tariffs affecting €380 billion in EU goods, marking a critical juncture in the ongoing trade dispute.

The European Commission's senior official stated, “We are not instigating this conflict,” emphasizing the EU's stance as a response to U.S. actions. The proposed tariffs could affect a wide array of U.S. products, including automobiles, alcoholic beverages, and various food items, as both parties engage in ongoing negotiations.

European businesses have been invited to provide feedback on the tariff proposals within the next month. The Commission is expected to make a definitive decision by July. “Our preference remains to resolve these issues through negotiation,” said the official, adding, “If we achieve zero tariffs by July, we can all enjoy a well-deserved holiday. However, we must prepare for the reality that some tariffs may still apply.”

Amid these developments, the EU appears to be bracing for a scenario where U.S. President Donald Trump's 10% “universal” tariff could be lifted, yet the 25% duties imposed on European steel, aluminum, and automotive products may endure. This precarious situation presents a potential threat of further tariffs hanging over the U.S. administration as discussions progress.

Moreover, the EU's consideration of tariffs on Boeing products may reignite a protracted trade dispute with Airbus, after a temporary truce in 2021. “Boeing is encouraged to share its insights on the proposed list,” remarked another Commission official, indicating a willingness to engage with U.S. industry representatives.

In addition to these tariff discussions, the European Commission has lodged a formal complaint with the World Trade Organization, challenging the legality of Trump’s tariffs on cars and “reciprocal” duties, which they describe as a “blatant violation” of international trade agreements.

The EU's recent stance follows earlier indications that it was preparing to retaliate with tariffs on €100 billion worth of U.S. goods if negotiations falter. Should President Trump decide to impose further tariffs on pharmaceuticals, semiconductors, and lumber, EU Trade Commissioner Maroš Šefčovič warned that European exporters might face duties on up to 97% of their exports to the U.S., totaling €549 billion in goods.

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