|
Brussels, |
|
How Brussels Plans to Counter Washington’s New Tariffs
EU launches a fast‑track consultation, readies a WTO case and a hefty tariff list while talks with the United States hang in the balance.
On 7 May 2025 the European Commission opened a four‑week public consultation on a draft package of counter‑tariffs and export restrictions worth almost €100 billion, targeting U.S. goods should negotiations fail to roll back the latest American duties. At the same time it will take the dispute to the World Trade Organization. Below, we unpack what the initiative entails, the strategy behind it, the stakes for both sides and how Washington might respond.
By Daniel Calls
4 MINUTES READ
4 MINUTES READ
Brussels, 12 May 2025 – The European Commission is threatening to slap nearly €100 billion in tariffs and export bans on U.S. goods unless Washington reverses a wave of duties that now engulfs 70% of EU exports to the United States.
In a notice posted on Wednesday, the EU executive opened a four‑week public consultation on two draft measures:
The move— the first procedural step under the EU Enforcement Regulation— coincides with Brussels’ plan to file a fresh case at the World Trade Organization against what it calls “blatantly unlawful” U.S. tariffs.
In a notice posted on Wednesday, the EU executive opened a four‑week public consultation on two draft measures:
- additional duties on €95 billion worth of U.S. imports,
- possible curbs on €4.4 billion in EU shipments of steel scrap and chemicals headed for American factories.
The move— the first procedural step under the EU Enforcement Regulation— coincides with Brussels’ plan to file a fresh case at the World Trade Organization against what it calls “blatantly unlawful” U.S. tariffs.
“Tariffs are already dragging on the global economy,” Commission President Ursula von der Leyen said in a statement. “We want a deal, but we are preparing for every scenario.”
Maroš Šefčovič, the EU Commissioner in charge of trade and economic security, added: “We will not accept an outcome at any price.”
A high‑stakes negotiation window
Washington in April unveiled a 20 % “reciprocal” levy on EU goods after hiking existing duties on steel, aluminium and, most controversially, 25 % on cars and car parts. The White House later paused the EU‑specific rate at 10 % for 90 days— a window that EU officials say expires in early July.
If no compromise is struck, the Commission’s draft retaliation list— which ranges from bourbon and pickup trucks to industrial machinery and textiles— could clear the final EU approval hurdle within weeks. The list has been drawn up to “maximise pressure while limiting collateral damage,” officials said.
The consultation, open until 10 June, invites companies, trade groups and EU governments to flag any unintended consequences or propose tweaks. Brussels will then circulate a final proposal to Member‑State delegates for a fast comitology vote.
While the tariff standoff plays out, Brussels will trigger the WTO’s dispute‑settlement machinery by requesting consultations over the U.S. measures. Under WTO rules, the parties have 60 days to find a solution before the EU can demand a panel ruling.
Trade lawyers warn the process could be slow: the WTO Appellate Body remains hobbled by Washington’s long‑standing blockade of new judges. Still, EU officials argue that pursuing litigation buttresses the bloc’s image as defender of rules‑based trade and could broaden support among other U.S. trading partners.
Commission estimates show €379 billion in EU sales— roughly 70 % of the bloc’s exports to the U.S.— face new or paused U.S. tariffs introduced since February. European carmakers have been hit hardest by the 25 % auto duty, while steelmakers complain of being squeezed twice: once by U.S. metal tariffs and again by diverted Asian shipments flooding EU ports.
Brussels also worries that U.S. measures on third‑country imports— notably from China— are rerouting surplus steel and aluminium into Europe, depressing prices and stoking political anger in manufacturing regions.
Brussels’ four‑part playbook
- Consult and calibrate – use stakeholder feedback to fine‑tune the hit list and guard EU supply chains.
- Lock in legal cover – classify the U.S. duties as “safeguards,” enabling proportionate EU rebalancing under WTO rules.
- Maintain leverage – keep the tariff cannon loaded but unfired while negotiations continue.
- Signal multilateral resolve – the WTO filing underscores that the EU sees the dispute as a systemic test.
What Washington might do
- De‑escalate – Strike a narrow deal that scraps the 20 % duty and offers EU carmakers relief; Brussels shelves its tariff package.
- Partial retreat – Trim auto duties but keep metal tariffs; the EU targets a smaller range of U.S. goods.
- Dig in – Allow the 90‑day pause to lapse; Brussels activates its full list, sparking a fresh round of retaliatory blows.
U.S. farm groups and whisky distillers— already collateral damage in previous trade fights— have urged the White House to avoid a new tariff war. On Capitol Hill, lawmakers from export‑heavy states have likewise warned of inflation and job losses.
Conclusions
If the consultation confirms broad support, the Commission expects to finalise its legal act in early July— just as the U.S. pause expires. The document would remain “in the drawer” unless talks fail.
Meanwhile, EU diplomats are racing to craft a face‑saving compromise: rumoured ideas include deeper cooperation on critical minerals, regulatory alignment on electric‑vehicle subsidies and a revival of stalled talks on steel‑and‑aluminium “green clubs.”
For now, businesses on both sides of the Atlantic face an uneasy summer. Should negotiations flounder, a tit‑for‑tat tariff spiral could jolt markets, complicate the U.S. election season and further strain the transatlantic alliance at a time of wider geopolitical tension.
Stakeholders can download the draft product lists and submit feedback via the Commission’s consultation portal until 10 June.
Note: Trade policies and tariffs are subject to change due to new agreements, policy shifts, or trade disputes. For the most current information, it is advisable to consult official EU trade resources or recent announcements from the European Commission.
Access the Full Strategic eBriefing
For detailed tables, timelines, and country-by-country response strategies, download the exclusive eBriefing:
The briefing includes:
For detailed tables, timelines, and country-by-country response strategies, download the exclusive eBriefing:
The briefing includes:
- Country-by-country responses and timelines
- Strategic objectives behind national positions
- Key risks, economic signals, and policy implications
