According to sources familiar with the matter, the European Union is preparing a list of potential retaliatory measures against the United States, including tariffs on the US service sector and export control measures. This action comes in response to the breakdown of trade negotiations with Washington, specifically following former US President Donald Trump's announcement of plans to impose new tariffs on EU member states.
The list, being compiled by the European Commission, includes measures that have not yet been disclosed, but they are sure to target a wide range of American companies, including technology firms. This list must be approved by the EU member states before it can be implemented.
These potential measures come in addition to other proposals already under discussion in the EU, which target $72 billion worth of American imports annually. These proposals include tariffs on products such as Boeing aircraft, automobiles, and bourbon whiskey.
Economists fear that an escalation of the trade war between the United States and the European Union could have significant negative impacts on the European economy. Banks such as Barclays estimate that the imposition of reciprocal tariffs of 35% by the United States and 10% by the European Union could lead to a 0.7% reduction in the Eurozone's economic output. This is in addition to potential inflationary pressures, which could prompt the European Central Bank to further reduce interest rates.
A report by the German Economic Institute indicates that tariffs of 20% to 50% could cost the German economy more than 200 billion euros by 2028. These significant losses highlight the serious risks facing Europe if trade tensions continue to escalate.
Under these circumstances, the European Union is seeking to strengthen cooperation with other countries affected by Trump's trade policies, such as Canada and Japan. These efforts aim to coordinate positions and take joint actions to mitigate the negative effects of American tariffs.
The threat of reciprocal tariffs between the United States and the European Union poses a significant challenge to the global economy. While the European Union seeks to protect its trade interests, the need for diplomatic and negotiating solutions has become more urgent than ever to avoid a devastating trade war.
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