EU Prepares Retaliatory Tariffs as US-EU Talks Stall

This week, the European Union and the United States engaged in discussions regarding tariff issues, but no significant progress was made. The EU has indicated that it will continue to advance retaliatory tariff measures.

European Commission President Ursula von der Leyen stated on Wednesday that the familiar Western alliance under the Trump administration no longer exists. She warned that if the US-EU negotiations do not result in a resolution, American manufactured goods and digital services could become targets of retaliation.

The EU Trade Spokesperson, Olaf Gil, emphasized that the EU prefers to resolve issues through negotiations rather than imposing tariffs, which would harm both economies, businesses, and consumers. He noted that achieving success within the 90-day deadline requires substantial efforts from all parties. The EU is doing its part, and now it is the US's turn to clarify its position. Like any negotiation, this must be a two-way process.

During the week, Trump reiterated his dissatisfaction with the EU, stating that the EU has taken advantage of the US by not purchasing American food and automobiles. Additionally, the US has increased pressure on the EU by announcing investigations into imported pharmaceuticals and semiconductors, which could further escalate the trade war.

Gil commented that this was expected, and the EU has prepared strong countermeasures for these sectors. If negotiations do not yield successful results, the Commission will continue to prepare retaliatory measures. Everything is on the table.

The EU's top exports to the US include pharmaceuticals, vehicles, and machinery. The EU's trade surplus with the US in 2023 was 480 billion euros, comprising a 157 billion euro surplus in goods trade and a 109 billion euro deficit in services trade.

Attention is now focused on Italian Prime Minister Giorgia Meloni, who is scheduled to meet with Trump on Thursday to seek relief from the current tensions. She is the first European leader to meet with Trump since early this month and the only EU leader invited to Trump's inauguration in January. Von der Leyen has not yet met with Trump, meaning she must rely on others to advance the EU's interests.

Teneo's co-CEO Wolfango Piccoli noted that this provides Meloni with a key opportunity to demonstrate her close relationship with Trump and her potential role in revitalizing communication and cooperation between Europe and the US.

Previously, the EU had already implemented retaliatory trade measures against the US. The first wave targeted Trump's 25% tariffs on steel and aluminum imposed last month, with the EU planning to impose tariffs on approximately 21 billion euros worth of American goods, with most goods subject to a 25% tax rate.

However, following Trump's announcement to suspend reciprocal tariffs, the EU agreed to postpone its retaliatory tariff measures against the US, originally scheduled for April 15, for 90 days. Von der Leyen warned that if subsequent negotiations are not satisfactory, the EU will continue to take retaliatory measures.