From the start of President Trump’s “Liberation Day” and the subsequent tariff imposition on the European Union (EU), Europe has faced multiple rounds of economic pressure. In response, it has retaliated by implementing moderate countermeasures while preserving European unity, given the economic and security interests of its members. While Europe has imposed 25 percent tariffs on aluminum, imported cars, and steel, as well as a 10 percent tariff on various other products, it has avoided implementing harsher retaliatory measures.
When the EU announced plans to craft a response to counter Trump’s tariffs, the president took a step back and reduced the last round of tariffs imposed on the EU by 10 percent for 90 days. Trump did so to pause EU retaliatory tariffs against American metals and to allow room for open negotiations with European Commission President Ursula von der Leyen. Although von der Leyen presented Trump with the possibility of eliminating tariffs on industrial goods between the two parties, Trump immediately rejected the offer and instead demanded that the EU purchase $350 billion worth of American fossil fuels. Given Trump’s uncompromising negotiating style, the EU has begun developing its plan to fight back.
This plan would consist of surcharges on various products such as chemicals, plastics, aerospace, automobiles, electronic equipment, agricultural goods, and machine tools. These products accounted for €95 billion in sales in the European Union the previous year. If Trump remains unwilling to negotiate a mutually beneficial agreement, the president risks losing €4.4 billion in EU products, such as toluidines, enzymes, and others needed to produce beverages and other products in the US, entering the American market. Moreover, the US could lose access to EU scrap metal, which could potentially decelerate the growth of the US steel industry and disrupt production in key sectors like aerospace and defense.
Due to the uncertainty surrounding the American president’s actions, and the fear of an escalation of the ongoing trade war, the EU has issued a warning. If no agreement can be reached with the US, the European bloc plans to implement its Anti-Coercion Instrument (ACI), allowing it to retaliate against countries, such as the US, that exert excessive economic pressure on EU member states. The European Commission has also announced that the EU is closely examining the possibility to redirect global exports from the EU market to other countries, due to US duties imposed on third countries. To achieve this, the Commission has been actively searching and negotiating with other trading partners, aiming to establish new sales channels and diversify sources of supply. In addition, the EU believes that tariffs will ultimately strengthen trade and the European market as a whole, making it more unified.
Many businesses, particularly carmakers, have spoken out on the issue. BMW, one of the largest auto exporters in the US, commented that both the EU and the US should pursue common ground based on free trade. Others, like Mercedes-Benz–who produced fewer than one million vehicles in the US, half of which were exported–have chosen not to comment on the ongoing tariffs or their potential business impact.
Furthermore, the EU plans to bring a case against the US at the World Trade Organization (WTO), citing aggressive trade measures taken against various countries engaged in commerce with the US. The EU argues that American tariffs “blatantly violate fundamental WTO rules”. Through this action, the EU seeks to reaffirm that internationally agreed trade rules must be respected by all WTO members.
Featured image courtesy of Can Yilmaz, Euronews (2025).
