The European Union is preparing for potential economic fallout after U.S. President Donald Trump signaled plans to impose new tariffs on European goods, citing trade imbalances and regulatory disputes.
Washington has accused the EU of unfair trade practices and targeting American technology firms with stricter regulations and hefty fines. Trump has vowed to take a tougher stance, favoring a lighter regulatory approach for U.S. companies operating in Europe.
The U.S. administration plans to introduce a 25% tariff on European steel and aluminium imports starting March 12, a move expected to hit EU manufacturers hard. Brussels has warned it will respond with “firm and proportionate” countermeasures.
“The EU will act to safeguard its economic interests. We will protect our workers, businesses, and consumers,” European Commission President Ursula von der Leyen said in a statement.
Economic Stakes in EU-US Trade
The EU and U.S. are each other’s largest trade partners, with bilateral trade flows exceeding €1.6 trillion in 2023. While the EU recorded a €157 billion trade surplus in goods, it ran a €109 billion deficit in services.
If implemented, the tariffs could raise costs for European exporters, making their products less competitive in the U.S. market. In turn, EU countermeasures could make American goods more expensive for European consumers.
Trade analysts warn that broader U.S. tariffs could prompt other nations to redirect exports to Europe, intensifying competition for EU firms. Uncertainty surrounding the trade dispute could also dampen business confidence and investment.
EU’s Response Options
Brussels is expected to prioritize negotiations to de-escalate tensions. If talks fail, the EU could impose retaliatory tariffs on U.S. goods or file a complaint with the World Trade Organization. It may also activate its newly established anti-coercion instrument, allowing for countermeasures against trade restrictions.
European Parliament members have urged the EU to maintain a firm stance.
“Tariffs are taxes—bad for businesses, worse for consumers,” European Commissioner Maroš Šefčovič said.
Bernd Lange, chair of the Parliament’s trade committee, hinted at possible EU retaliation. “Isaac Newton knew that for every action, there is a reaction,” he said.
Brussels and Washington remain deeply intertwined economically, but with Trump’s second term signaling a more protectionist approach, the risk of a transatlantic trade war is growing.
