Jul 28, 2025
Measures target $109 billion in US goods if negotiations fail
The European Union is poised to implement significant counter-tariffs on American goods, valued at approximately €93 billion ($109 billion), if ongoing trade negotiations with the United States do not yield a favourable outcome by August 1. This move comes as a direct response to the US's proposed tariff increases on EU products.
Background
The EU's decision to prepare countermeasures follows a series of trade tensions with the US, particularly concerning tariffs on steel and aluminium. Initially, the EU had imposed countermeasures in April 2024, which were subsequently suspended to allow for diplomatic negotiations. However, with the US administration's recent threat to impose 30% tariffs on EU goods, the European Commission has decided to proceed with a robust set of counter-tariffs.
Details of the Countermeasures
The proposed EU countermeasures encompass a wide array of US goods, including agricultural products like poultry, beef, and various cereals, as well as industrial goods such as aircraft, cars, and machinery. The tariffs, which range from 4% to 30%, are set to take effect on August 7 if no agreement is reached. Additionally, the EU plans to ban the export of certain metal scraps to the US, with exceptions for humanitarian and emergency situations.
Market Implications
The potential implementation of these tariffs could significantly impact trade flows and logistics between the EU and the US. Industries on both sides of the Atlantic may face increased costs, which could lead to higher prices for consumers and disruptions in supply chains. The agricultural and industrial sectors, in particular, are likely to feel the immediate effects, with tariffs on key commodities and manufactured goods.
Political Dynamics
The European Union's strategy also includes the potential use of the Anti-Coercion Instrument (ACI), which has been dubbed the "Trade Bazooka." This instrument is being considered as a means to counteract any further economic pressure from the US. France and Germany have expressed strong support for these measures, emphasising the need for a unified and robust response to US trade policies.
As the August 1 deadline approaches, the EU remains firm in its stance, prepared to enact these countermeasures to protect its economic interests should negotiations with the US fail.