How EU plans to tackle Trump's 30% tariff threat
What's the story
The European Union (EU) is preparing a massive counterattack against the United States, with plans to impose 30% tariffs on goods worth €100 billion ($117 billion). The move comes as a response to US President Donald Trump's threat of imposing the same rate on most EU exports after August 1. The proposed tariffs would target US exports, including industrial goods such as Boeing aircraft, American-made cars, and bourbon whiskey.
Tariff implementation
EU's countermeasure strategy
The EU's countermeasure strategy involves merging an already approved tariff list on US goods worth €21 billion with a proposed one on additional American products worth €72 billion. The combined package would be ready for implementation next month, but only if no deal is reached and the US goes ahead with its tariffs after August. This comes as EU member states, including Germany, have taken a tougher stance in response to the US's rigid negotiating position.
ACI support
Germany backs activation of ACI
Germany is even willing to back the activation of the EU's anti-coercion instrument (ACI) in a no-deal scenario. The ACI, which is the bloc's most powerful trade tool, would only be activated if a deal fails to materialize. It could allow the EU to take a wide range of retaliatory measures like imposing new taxes on US tech giants, restricting US investments, and limiting access to the EU market.
Statement
'Need fair, reliable agreement with low tariffs'
German Chancellor Friedrich Merz has emphasized the need for a fair and reliable agreement with low tariffs. However, despite these preparations and hardened positions from member states like Germany, there is still a strong inclination to keep negotiations with Washington going in hopes of resolving this impasse before next month's deadline.