The European Union is ready to talk about a tariff-free trade deal with the United States, but it also warns that it can respond if needed. Trade ministers from the EU met in Luxembourg on Monday to discuss how to handle US tariffs on steel and aluminum. Most agreed that avoiding a full-blown trade war should be the main focus.
After the meeting, EU Trade Commissioner Maros Sefcovic spoke to reporters, mentioning that the EU’s countermeasures would be adjusted based on feedback from member states. He noted that the EU is considering a response worth around 26 billion euros but clarified that the final amount would likely be lower after discussions.
European Commission President Ursula von der Leyen expressed the EU’s willingness to negotiate a "zero-for-zero" tariff agreement on industrial goods. However, she confirmed that the EU plans to impose retaliatory duties on certain US imports starting next week. Sefcovic stated that the first round of tariffs will take effect on April 15, with a second round following on May 15, directly responding to US tariffs on European products.
Sefcovic emphasized that while the EU prefers negotiation, it is prepared to escalate its response if necessary. This could involve using the Anti-Coercion Instrument, which would allow the EU to limit access for US companies to public contracts or target American services. However, some EU nations, particularly those with strong trade ties to the US, are cautious. Irish Foreign Minister Simon Harris called the ACI a "nuclear option" and indicated that most EU countries are not ready to take such drastic measures.
The EU is facing a challenging situation, with 25 percent tariffs from the US on steel, aluminum, and cars, plus 20 percent on many other goods. In terms of trade volume, the EU imports significantly less from the US than it exports, which limits its options compared to the US.
Dutch Trade Minister Reinette Klever urged a careful approach, warning that hasty actions could further destabilize markets. She suggested that the EU should respond in a way that calms the situation rather than escalating it.
Despite the EU’s measured stance, the planned tariffs have sparked controversy. President Trump has threatened to impose a 200 percent counter-tariff on EU alcoholic beverages if the EU goes ahead with a proposed 50 percent duty on US bourbon. This has raised alarms in France and Italy, where wine and spirits are major exports.
As tensions rise, both sides seem to recognize the need for dialogue, but the path forward remains uncertain. The EU is preparing for potential trade battles while hoping to find common ground with the US.