The European Commission has proposed to impose tariffs of 25 percent on certain US products in response to the increased US tariffs on steel, aluminum, and cars. This measure is part of a broader countermeasure package aimed at protecting the EU’s interests while simultaneously promoting negotiations with the US.
Background and Motivation
The US government under President Donald Trump has made several tariff decisions in recent years that significantly affect the EU. These include import tariffs of 25 percent on steel and aluminum, as well as tariffs of 20 percent on nearly all other EU exports. Additionally, 25 percent tariffs have been imposed on European cars and auto parts. These actions have led to a significant trade dispute between the two economic powers.
Planned EU Countermeasures
The European Commission is preparing countermeasures to respond to the US tariffs. These include the introduction of tariffs on certain US products, potentially including jeans, motorcycles, and peanut butter. The tariffs could come into effect on May 16 for some products, while others may only be affected starting December 1.
Impact on the Trade Market and Consumers
The increased tariffs could have significant effects on international trade. They make imported products more expensive, which may lead to higher prices for consumers. Moreover, they could increase uncertainty in the markets and dampen economic growth. However, the EU hopes that these measures will prompt the US to engage in negotiations and avoid escalation.
Negotiations and Escalation Risks
The EU remains open to dialogue and hopes for a negotiated solution. Commission President Ursula von der Leyen has already proposed to abolish all tariffs on industrial goods, although this has not yet been taken up by the US side. However, there are also voices within the EU warning of escalation, especially regarding the use of the Anti-Coercion Instrument (ACI).
Possible Expansion of Measures
In addition to the planned tariffs on physical products, discussions are also underway regarding a digital tax for US technology companies. These measures could affect companies such as Google, Amazon, or Netflix. However, the EU is cautious, as it wants to avoid escalation.