The European Union (EU) has issued a stern warning of immediate retaliation should U.S. President Donald Trump proceed with imposing new tariffs on steel and aluminum imports.
Trump’s plan entails a 25% tariff on these imports, a move that has been met with strong opposition from EU officials.
The European Commission emphasized that there is “no justification” for such tariffs on EU exports, labeling them as unlawful and counterproductive.
They argue that these measures would lead to increased costs and inflation within the U.S.
This development mirrors a previous episode during Trump’s tenure when similar tariffs affected €6.4 billion of EU exports, prompting the EU to implement retaliatory tariffs.
European leaders, including German Chancellor Olaf Scholz and French President Emmanuel Macron, have expressed their readiness to respond decisively.
Macron cautioned that such tariffs could harm the American economy and has advocated for strengthening EU unity and reducing dependency in light of recent global events.
In anticipation of potential escalations, the EU is preparing to target U.S. service industries, notably Big Tech, using the “anti-coercion instrument” (ACI).
This mechanism allows the EU to respond to coercive tariffs by imposing restrictions on services without breaching international law.
Possible measures include revoking intellectual property rights protection, blocking foreign investment, and restricting market access to financial services.
However, such actions would require approval from at least 15 of the 27 member states, a process that could take weeks.
The looming trade dispute has raised concerns about potential strains on economic ties and disruptions in global markets.
The U.S.-EU trade and investment relationship is the largest in the world, with significant economic stakes.
Trump has criticized the EU for a substantial trade surplus and limited imports of U.S. goods, emphasizing the trade imbalance and low European military spending.
EU leaders are open to negotiations and possible concessions, such as purchasing more U.S. liquefied natural gas or military equipment, but stress that a trade war benefits no one except China.
As the situation develops, the EU remains committed to defending its interests while advocating for dialogue and cooperation to prevent a full-blown trade war.
