The European Commission plans to impose retaliatory tariffs worth €93 billion on US goods if President Donald Trump goes ahead with his plan to impose a 30% tariff on EU exports starting August 1. Talks are currently underway between EU Trade Commissioner Maros Sefcovic and US Commerce Secretary Howard Lutnick in an effort to find a negotiated solution before the deadline.
The EU will combine two previous lists of retaliatory tariffs worth €21 billion and €72 billion respectively into a comprehensive list that will be presented to member states for approval. However, no action will be taken before August 7. So far, the EU has not implemented any retaliatory measures despite approving the first step in April. Germany fully supports the EU's approach to preparing for this eventuality.
The initial agreement between the US and Japan, which set a basic tariff rate of 15%, also influenced the EU in formulating its negotiating approach. European auto stocks surged as investors saw the potential for the EU to get similar tariffs on its vehicle exports to the US market. While Washington remains firm on auto tariffs, Japan's success has raised hopes that the EU could secure a comparable deal, as the EU is also a major exporter in the sector.
However, analysts warn that without a deal, Japanese automakers will have a significant advantage over European competitors. The EU is currently reviewing the details of the US-Japan deal, including Japan buying more rice from the US while maintaining existing agricultural tariffs. Geopolitical analysts say that what Japan has now achieved will be a minimum benchmark in the increasingly bitter EU-US negotiations.
