EU mulling options for tariff retaliation plans
by: Philip Blenkinsop
Reuters
BRUSSELS - The European Union is exploring a broader set of possible countermeasures against the United States as prospects for an acceptable trade agreement with Washington fade, according to EU diplomats.
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An increasing number of EU members, including Germany, are now considering using wide-ranting "anti-coercion" measures that would let the bloc target US services or curb access to public tenders in the absence of a deal, diplomats say.
..... The European commission, which negotiates trade agreements on behalf of the 27-member bloc, had appeared on course for a agreement in which the EU would still have face a 10% tariff on most of its exports, with some concessions.
..... Such hopes now seem ashed after President Donald Trump;s threat to impose a 30% tariff by August 1, [2025] and following talks between EU Trade Commissioner Maros Sefcovic and U.S. counterparts in Washington last week. [07/18/2025]
..... Sefcovic, who has said a 30% tariff would "practically prohibit: trans-Atlantic tread, delivered a sober report on the current state of play to EU envoys on July 18, [2025] diplomats told Reuters.
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U.S. counterparts had come up with diverging solutions during his meeting, including a baseline rate that could be well above 10%, the EU diplomat added.
..... "Each interlocutor seemed to have different ideas. No one can tell (Sefocvic) what would actually fly with Trump," one diplomat said.
..... Prospects of easing or removing 50% tariffs on steel and aluminum and 25% on car parts appear limited.
..... Washington has also rejected the EU's demanded for a "standstill" arrangement, whereby no further tariffs would be imposed after a deal is struck. The rationale, according to diplomats, is that Trump's hands cannot be tied on national security, the basis of Section 232 trade investigations into pharmaceuticals, semiconductors and timber.
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Accordingly, the mood has pivoted among EU countries, EU diplomats say, and they are more ready to react, even though a negotiated solution is their preferred option.
..... The EU has one package of tariffs on $24.5 billion of U.S. goods that is currently suspended until August 6. [2025] The bloc must still decide on a further set of countermeasures on 72 billion euros of U.S. exports.
..... Discussions have also increased on using the EU's wide-ranging "anti-coercion" instrument that allows the bloc to retaliate against third countries that put economic pressure on member states to change their policies.
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Brought in more with China in mind, it would allow the bloc to hit trade in U.S. services, in which the U.S. has a trade surplus with the EU, limiting U.S. companies' access to financial service markets and to public tenders in the EU. Public procurement in the EU is worth around 2 trillion euros per year.
..... European Commission President Ursula von der Leyen said last week [07/18/2025] that the ACI was cerated for extraordinary situations, adding: "we are not there yet."
..... The commission would need a qualified majority of 15 counties making up 65% of the EU population to invoke it. It would not do so unless it was confident of passing it, but there are now growing signs of support building., EU diplomats say.