The Commission is reluctant to say what measures it might take, stressing that “everything is on the table.” “All options are on the table and we don’t want to speculate on what we will do,” a senior Commission official told reporters, speaking on condition of anonymity. In doing so, it will be careful to make any potential countermeasures as painful as possible for the United States while causing as little damage to Europe as possible, i.e. imposing tariffs on American products for which there are alternatives.
Next week, the European Commission will adopt countermeasures in response to US tariffs on aluminum and steel imports, while the response to the imposition of tariffs on cars and reciprocal tariffs of 20 percent on a large number of products will follow analysis and consultations with member states. Starting on March 12, the decision imposed 25 percent tariffs on aluminum and steel imports into the United States from around the world and came into effect on April 3, a 25 percent tariff on all cars and car parts not manufactured in the United States.
On April 2, US President Donald Trump declared a trade war across the planet and announced reciprocal tariffs, a minimum of 10 percent for everyone, and even higher tariffs for about 60 countries, which will take effect on Wednesday, April 9. He lowered customs duties from 20 percent on the European Union, 34 percent on China. It remains unclear whether the announced tariffs will remain permanent or are part of a tactic to win concessions. Trump said the tariffs would give him “great negotiating power.”
EC PROPOSAL
Since the middle of last week, the Commission has been consulting member states on countermeasures to the US steel and aluminium tariffs, and a decision is expected to be taken on Wednesday and enter into force on 15 April. The decision is taken on a Commission proposal under the comitology procedure, which in practice means that the Commission can take a decision unless it is opposed by a qualified majority (55% of member states representing at least 65% of the total EU population). If there is no qualified majority either for or against the proposal, the Commission can take a decision independently. The Commission announced a proportionate response of up to €26 billion, corresponding to the economic scope of the US tariffs.
All ON THE TABLE
The Commission is reluctant to say what measures it might take, stressing that “everything is on the table.” “All options are on the table and we don’t want to speculate on what we will do,” a senior Commission official told reporters, speaking on condition of anonymity. In doing so, it will be careful to make any countermeasures as painful as possible for the United States while causing as little damage to Europe as possible, meaning tariffs should be imposed on American products for which there are alternatives.
“We will not impose tariffs on products we do not produce, while the Americans imposed tariffs, for example, on coffee or bananas, which they do not produce at all,” said an unidentified Commission official. He added that Europeans have alternatives, for example, on Harley Davidson motorcycles, Levi’s jeans or soybeans. At the same time, care must be taken to distribute the burden of the countermeasures it intends to introduce equally among members, because not all members are equally dependent on trade with the US market. The most exposed are Ireland, Germany and Italy.
THE NUCLEAR OPTION
The Commission also has a powerful instrument at its disposal, which some call the “nuclear option”. It is an instrument to combat coercion, which allows the EU to retaliate with countermeasures against countries that use economic coercion and trade to influence Union decisions. The Anti-Coercion Instrument (ACI) provides for a wide range of possible countermeasures if a country does not abandon the use of coercion. These include the introduction of tariffs, restrictions on trade in services and commercial aspects of intellectual property rights, and restrictions on access to foreign direct investment and public procurement. This instrument has never been used before, and was originally conceived as a means to curb Chinese pressure.
