Should trade negotiations with Washington falter, the European Commission is considering imposing tariffs on $84.1 billion (72 billion euros) worth of US products.
These goods include a range of items, from Boeing aircraft and bourbon whiskey to automobiles, according to a Reuters report.
US President Donald Trump has proposed a 30% tariff on EU imports starting August 1.
European officials deem this level unacceptable, warning it would severely disrupt normal trade relations between two of the world’s largest economic blocs.
Economic repercussions
The potential tariff hike signals escalating trade tensions and could lead to significant economic repercussions for both the US and the EU.
The list, preceding Trump’s weekend escalation of pressure on the 27-nation bloc, is a response to existing US tariffs on automobiles, car parts, and a 10% baseline tariff, rather than his recent actions.
The list, which was sent to the EU, was seen by Reuters.
The package, valued at 6.35 billion euros, encompasses a diverse range of products.
The package included chemicals, medical devices, and both electrical and precision equipment. Additionally, it covers agriculture and food products, specifically a variety of fruits and vegetables, as well as wine, beer, and spirits.
Officials announced after a meeting of EU ministers in Brussels on Monday that they were still trying to reach an agreement to avert Trump’s significant tariff impact.
Tariff strategy
Maros Sefcovic, the EU trade chief, stated that attendees at the meeting showed “unprecedented resolve” to safeguard EU businesses.
This would involve employing European countermeasures if negotiations with Washington do not result in an agreement.
He said at a press conference:
The message was (the) strongest I’ve witnessed since we started the discussion with the U.S.. And therefore we’ll negotiate first, but we’ll prepare at the same time.
On Tuesday, French Foreign Minister Jean-Noel Barrot criticised Trump’s latest threat as having “the appearance of blackmail.”
He emphasised that while a trade agreement was a priority, it should not come at the cost of France becoming “a vassal of the United States.”
Trump has cautioned Brussels against retaliatory measures, indicating that the US would mirror any new European levies by simply incorporating them into the existing 30% rate.
The EU trade policy is overseen by the European Commission, which has not yet specified a tariff rate for the products on its list.
The package requires approval from EU member states before implementation, and no specific voting date has been established.
Usually, the Commission would address concerns raised by EU governments and implement countermeasures unless 15 countries expressed opposition.
Diplomatic efforts
Heavily reliant on the US market, Europe’s drinks industry has been actively lobbying governments.
Their aim is to prevent bourbon, wine, and other spirits from being included on the EU’s list, fearing retaliatory measures from Washington.
France, Spain, and Italy have specifically voiced concerns regarding the potential economic repercussions.
The EU’s initial tariff package, valued at 21 billion euros on U.S. goods, notably excluded alcoholic beverages when it was approved in April.
This package was promptly suspended to facilitate negotiations, a suspension now prolonged until August 6.
European shares saw a slight increase on Tuesday, driven by strong performance in the automotive sector.
This rise followed Monday’s statement from Trump, who indicated his willingness to engage in discussions with the EU and other trade partners.
Initially, the Commission proposed a second package in May for public consultation, designating approximately 95 billion euros worth of US goods for countermeasures.
While this figure has since been reduced, the majority of key items are still included.
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