EU proposes tariffs on $100B U.S. goods, explores all options

EU Mulls $113B Tariffs on U.S. Goods if Trade Talks Stall, Sources Say
(Based on reports from CCTV and interviews with experts)

According to informed sources, the EU plans to impose additional tariffs on approximately €100 billion ($113 billion) worth of U.S. goods if ongoing transatlantic trade negotiations fail to yield satisfactory outcomes for Brussels. On the 6th local time, EU Trade Commissioner Valdis Dombrovskis stated that during the 90-day pause announced by U.S. President Donald Trump, the EU will draft countermeasures against U.S. tariffs on European products and consider "all options." He emphasized that the EU is neither weak nor will it yield to "unfair" pressure from U.S. demands.

The proposed retaliatory measures are expected to be shared with EU member states as early as the 7th, followed by a one-month consultation period before finalizing the list, which remains subject to potential adjustments.

Expert Analysis
Zhao Yongsheng, Director of the French Economic Research Center at the University of International Business and Economics (UIBE) and doctoral supervisor at Sorbonne University in Paris, told First Financial Daily that the EU continues to employ a "containment strategy." Based on available information, he noted that progress in U.S.-EU negotiations remains limited.

Shi Shiwei, Visiting Researcher at the Modern China Institute of Berlin Free University and Co-Director of the Sino-German Economic and Trade Research Center at UIBE, added: "While the EU refuses to capitulate to U.S. demands, it also values access to the American market."

EU's Dombrovskis Warns of Escalating Trade Measures as U.S. Tariffs Threaten 97% of EU Exports
(Based on statements from EU officials and expert analyses)

Key Points

1. Tariff Threats: Valdis Dombrovskis, EU Trade Commissioner, stated that U.S. tariffs currently cover 70% of EU goods exports to the U.S., a figure that could rise to 97% if Washington expands duties on pharmaceuticals, semiconductors, and other products. Currently, the EU faces 25% tariffs on steel, aluminum, and cars, plus 10% on most other goods. These rates may increase to 20% after Trump’s 90-day pause expires.
2. EU Countermeasures: The EU plans to use the remaining window until July 8 to prepare "rebalancing measures" and ensure a level playing field if talks fail. A draft proposal is expected to be shared with EU member states this week, followed by a one-month consultation period. Potential measures include reducing non-tariff barriers and boosting U.S. investments.
3. Stalled Negotiations: EU-U.S. trade talks, launched last month, have made limited progress. The EU proposed eliminating industrial tariffs—including on cars—to address U.S. concerns over unfair trade practices, but the U.S. rejected the offer. The EU has also floated purchasing more U.S. goods (e.g., LNG, soybeans), though experts question the feasibility of agricultural purchases due to Europe’s long-standing reservations.
4. Expert Insights:
   • Zhao Yongsheng (UIBE): "The EU is using a containment strategy. Negotiations are advancing slowly, and the post-mid-June period will be critical." He emphasized that while the EU aims to secure market access, it may resort to procurement deals as a supplementary tactic.
   • Shi Shiwei (UIBE): "The EU refuses to cave to U.S. pressure but values its market access. Both sides have leverage, but reaching a deal requires compromise."

Strategic Context

• U.S. Focus: Washington is prioritizing disputes over EU digital tax rules, tech regulations, and VAT policies. The EU, however, has ruled out negotiating tech rules and defended VAT as a non-discriminatory tax.
• EU’s Leverage: The EU highlights its global trade clout—87% of global trade occurs outside the U.S.-EU corridor, with ongoing negotiations with India, Indonesia, and Southeast Asian nations. "Our phones are ringing off the hook" for FTA talks, Dombrovskis noted.
• Trade Data: In 2023, the U.S. goods trade deficit with the EU was €155.8 billion ($168.6billion),whiletheU.S.rana€104billion($112.6 billion) services surplus, resulting in an overall U.S. deficit of €51.8 billion ($56 billion).

Escalation Risks
The EU warns it may target services and restrict exports if talks collapse. Recent DMA fines on Apple (€500 million) and Meta (€200 million) signal Europe’s willingness to impose penalties for non-compliance with digital tax laws.

Conclusion
"The EU holds significant leverage," Shi Shiwei added, citing Germany’s reliance on U.S. auto markets as a key incentive to avoid total breakdown. However, experts agree that divergent priorities—EU resistance to tech regulation vs. U.S. tariff threats—leave limited room for immediate resolution.