EU Trying to Deal with Trump on Tariff Drop, but Ready for Tit-for-Tat If No Compromise

The European Union has given itself four weeks to persuade President Trump to roll back his 20% tariffs on the bloc, opting for negotiations before retaliating in late April, FT reports.

Brussels is preparing countermeasures but will hold off in hopes of reaching a deal, according to EU officials. One official suggested Trump might reverse course, as he has before, given the economic fallout his "reciprocal" tariffs could cause globally.

European Commission President Ursula von der Leyen emphasized the EU's preference for diplomacy. "We are prepared to respond," she said, "but we would rather negotiate to remove any remaining barriers to transatlantic trade." She warned that Trump's tariffs would "massively" hurt the global economy, including the U.S.

The EU is finalizing its first countermeasures against U.S. steel tariffs and preparing broader responses to protect its industries. It plans to impose tariffs on up to €26 billion of American goods in mid-April and has yet to respond to last week's 25% levy on car exports. Any further actions require consultation with member states to secure majority approval, leaving room for talks.

Von der Leyen extended an olive branch, acknowledging that some countries "take unfair advantage" of global trade rules but cautioned, "Reaching for tariffs as your first and last tool will not fix it." She stressed that the EU would defend its industries, warning, "If you take on one of us, you take on all of us."

Meanwhile, EU leaders are lobbying behind the scenes to shield their industries from U.S. retaliation. France wants to drop proposed duties on bourbon whiskey, Ireland seeks to protect dairy exports, and Italy's Prime Minister Giorgia Meloni, a Trump ally, has called for a deal to avoid a trade war.

Trump has accused the EU of imposing an effective 39% tariff on U.S. goods, though Brussels estimates it at about 1%. His figure includes factors like VAT, which can reach 27% in some member states, and restrictions on imports of certain U.S. farm products. The White House has also criticized EU regulations on tech firms and digital taxation.

If negotiations fail, the EU could target American services, suspend intellectual property rights, or exclude U.S. companies from public procurement under its enforcement mechanisms. A more aggressive response could involve deploying its "anti-coercion" instrument for the first time.