The European Union is scheduled to vote on its first retaliation measure in response to President Trump's tariffs on Wednesday afternoon, approaching tasks on a variety of manufactured and agricultural products that will take effect at the stage starting next week.
The list for consideration is a slightly trimmed version of what was announced in mid-March in response to Trump's steel and aluminum tariffs. EU officials have been spending the past few weeks consulting policymakers and industries from across the 27 blocs to minimize how much the measures will harm Europeans.
The final list is expected to exclude bourbon, for example, after Trump threatened to place a 200% tariff on all European alcohol according to its inclusion. It would have been an overwhelming blow to wine producers in France, Italy and Spain.
“We're not a business we go to. No matter how many cents, there's dollars for the Tat, or for the dollar, or for the dollar, or for the dollar, or for the gold,” Bullock's trade commissioner Maros Sevkovic said this week.
Since last month, the US has introduced a 25% tariff on steel, aluminum and cars, and a wide 20% tariff on everything else that comes from Europe. European Union officials have said they prefer to negotiate to remove these higher taxes, and have even offered to cut tariffs to zero on cars and other industrial products if the US is doing the same thing.
However, serious negotiations are slow to materialize, which is surprising to see Europe overturned. Retaliation tariffs for Wednesday's vote will be the first step, dealing with only steel and aluminum taxation.
EU officials will soon announce their next steps early next week, a plan to return to both car tax and 20% tariffs. Like steel and aluminum retaliation, they plan to lay out the proposed contours of the response, consult with member states and vote on whether to proceed or not.
Officials claim that all the options are on the table. This means that further measures may continue.
For example, some national officials have suggested that Europe would need to use new trade weapons, often referred to as the European Union's “bazookas” to attack American service companies, including major technology companies like Google.
Although these measures have not been tried before, they could give Brussels a stronger negotiating position. Europe buys more services from the US than it sells. Europeans are important to the bottom of the Technology Giants.
However, it remains to be seen whether such aggressive service retaliation will actually occur. It is difficult to design in a way that is free from the cost of Europeans who have come to rely on services such as Google Search and American Cloud Technology. Also, different European capitals have different appetites for retaliation.
For now, the goal is to slowly and deliberately unfold the response in the hope that Europe's huge consumer market and critical economy may be sufficient to bring Washington closer to a solution.
“Europe is always quite prepared,” Ursula von der Leyen, president of the EU's administrative division, said this week. “But we are also ready to respond through measures and protect our interests.”
