EU says it prefers negotiations, but proposes first tariffs on US imports

The European Commission said on Monday it had offered a “zero-for-zero” tariff deal to avert a trade war with US President Donald Trump as EU ministers agreed to prioritise negotiations, while striking back with 25 per cent tariffs on some US imports.

The 27-nation bloc faces 25 per cent import tariffs on steel and aluminium and cars and broader tariffs of 20 per cent from Wednesday for almost all other goods under Trump’s policy to hit countries he says impose high barriers to US imports.

On Monday evening, the Commission proposed its first retaliatory tariffs at 25 per cent on a range of US imports in response to Trump’s steel and aluminium tariffs rather than the broader levies.

However, the list was shortened after the EU executive bowed to pressure from member states and removed bourbon, wine and dairy after Trump threatened a 200 per cent counter-tariff on EU alcoholic drinks. France and Italy, major exporters of wine and spirits, were particularly concerned.

EU trade chief Maros Sefcovic said earlier on Monday the retaliation would impact less than the previously announced €26 billion ($28.42 billion). The tariffs for most of the goods will go into effect May 16 and some from December 1.

Ministers overseeing trade met in Luxembourg on Monday to debate the EU’s response and discuss relations with China. Many said the priority was to launch negotiations to remove Trump’s tariffs, rather than fight them.

Michal Baranowski, deputy economy minister of Poland, told a press conference after the meeting that his EU counterparts did not want to be “trigger-happy.”

Sefcovic said discussions with Washington were at an early stage and that he had offered “zero-for-zero” tariffs for cars and other industrial products, expressing hope that discussions could begin.

However, Trump’s top trade adviser on Monday dismissed tech-billionaire Elon Musk’s push for “zero tariffs” between the US and Europe, calling the Tesla CEO a “car assembler” reliant on parts from other countries.

“While the EU remains open to – and strongly prefers – negotiation, we will not wait endlessly,” Sefcovic said, adding the bloc would push ahead with countermeasures and steps to avoid floods of diverted imports.

The EU is set to approve the first retaliatory measures this week. The bloc will start collecting the tariffs on April 15, with a second tranche starting a month later.

EU KEEPS ALL RETALIATION OPTIONS OPEN

The bloc is expected to produce a larger package of countermeasures by the end of April, as a response to US car and broader tariffs.

Sefcovic made clear the EU was ready to consider all retaliatory options. One is the EU’s Anti-Coercion Instrument, which allows it to target US services or to limit US companies’ access to EU public procurement tenders.

“We are prepared to use every tool to protect single market,” he said, echoing the views of French Trade Minister Laurent Saint-Martin.

In a war of tariffs on goods, Brussels has less to target than Washington, given EU goods imports from the US totalled €334 billion ($366.2 billion) in 2024, against €532 billion of EU exports to the US.

Some EU countries, particularly those exposed to trade with the United States, urged caution. Irish Foreign Minister Simon Harris described the ACI as “very much the nuclear option.”

Baranowski said EU members were open to keeping options open, with a stress on proportionality.

“There were various ideas put on the table. Some countries mentioned services. Other didn’t. Some countries mentioned digital services, others didn’t,” he said.

Outgoing German Economy Minister Robert Habeck said the EU should realise it was in a strong position – if it was united.

“The stock markets are already collapsing and the damage could become even greater … America is in a position of weakness,” he said in Luxembourg.