Europe Prepares $118 Billion Retaliation Against US Goods Amid Trade Dispute
The European Union is finalizing plans to impose retaliatory tariffs on American goods valued at 100 billion euros ($118 billion) should trade negotiations with the United States fail to reach an agreement by a looming deadline. This move is a direct response to President Trump’s threat to implement 30% customs duties on European products.
Sources indicate that the european Commission, the EU’s executive arm, is confident in securing the qualified majority of member states needed to activate the Union’s “preferential trade mechanism.” This powerful trade tool, designed as a deterrent, allows for a broad range of countermeasures. These could include new taxes on major American technology companies, targeted restrictions on US investments, and limitations on market access within the EU.
The proposed retaliatory tariffs are expected to average 15%, significantly increasing the current Most Favored Nation (MFN) tariff rate of 4.8% for trade between the EU and the US. This would represent an additional 10% burden compared to the existing situation. Similar rates are reportedly being considered for sectors such as pharmaceuticals and semiconductors.
While the EU aims to protect its interests,reports suggest that the 15% average tariff might include limited exemptions for certain sectors. These could potentially encompass aviation-related goods, some medical devices, generic drugs, specific alcoholic beverages, and certain manufacturing equipment crucial for US industries. Brussels is also working to shield its pharmaceutical and semiconductor sectors from future sectoral tariffs, with discussions underway to establish maximum levels for such duties.This advancement follows President Trump’s recent proclamation of a trade agreement with Japan,which includes 15% tariffs on imports,a reduction from his initial 25% threat. This agreement also implies that tariffs on Japanese cars will be less than the 25% currently imposed on major car exporters, including those from the European Union. The EU’s preparedness to activate its trade mechanism underscores the escalating tensions in the ongoing trade dispute.
