It might have been good intuition or simply the inevitable outcome of escalating rhetoric from across the Atlantic, but theEuropean Union’s trade ministers chose to move up their extraordinary Council meeting. Instead of waiting until May, they convened this Monday in Luxembourg, marking their first political gathering since US President Donald Trump’s latest tariffs salvo.
One message was clear from the start: Europe will respond with both unity and determination. French minister delegate for trade Laurent Saint-Martin criticized the US tariffs as “very aggressive and arbitrary,” adding that France “prefers cooperation to confrontation.”
Meanwhile, Germany’s outgoing Economic Minister Robert Habeck underscored the need for European solidarity, emphasizing that only through cooperation would the EU stand a chance of overcoming the growing trade tensions.
The stakes of these discussions were high — and the objectives even higher. EU Trade Commissioner Maros Sefcovic framed the moment as a critical juncture in global trade, asserting that Europe must now recalibrate its position to navigate what he called a paradigm shift in international commerce.
What happened?
Last week, the EU faced a major blow as the US unveiled its third round of tariffs — set to be the largest yet. Nearly all goods exported from the EU to the US will be subject to a 20% levy, announced by President Donald Trump. This move follows the imposition of 25% tariffs on steel and aluminium imports, as well as a similar 25% tariff on car exports that have already come into effect.
The potential fallout is significant. These new tariffs will impact around 70% of all EU exports to the US, valued at €532 billion ($585 billion) in 2024. Trump has defended the measures, pointing to Europe’s substantial trade surplus with the US, which reached $235.6 billion (€215.5 billion) in 2024, according to US government figures.
Avoiding any hasty reactions
Those hoping for concrete announcements on how the EU will respond to the sweeping tariffs after Monday’s meeting were left disappointed.
Without offering specifics, Trade Commissioner Maros Sefcovic made it clear that the Council’s primary focus had been on finalizing countermeasures to address Trump’s steel and aluminium tariffs. However, he acknowledged that the latest round of tariffs “forces us to consider additional steps.”
The insights gathered from member states through their ministers will now be evaluated before any further decisions are made.
Striking the right balance
Since Trump’s bold announcement in the White House Rose Garden last Wednesday, the EU has been grappling with how to respond effectively.
“They must strike a balance between the necessary political response — demanding that the US stop its actions and adopting countermeasures — and the economic reality that implementing tariffs could ultimately be counterproductive for the European economy,” says Cinzia Alcidi, Senior Research Fellow at the Centre for European Policy Studies in Brussels.
Finding unity
A key challenge in crafting a unified response is that the American tariffs do not affect all EU member states equally. Germany, the hardest hit in terms of export volume, sent goods worth over €161 million ($176 million) to the US in 2024 — accounting for 23% of its total exports. Ireland, too, has much to lose, as nearly 30% of its exports are destined for the US. In contrast, countries like the Netherlands and Poland have a trade deficit with the US and are less affected.
This has led to European economy ministers pleading for different responses, from tough to cooperative. Ireland’s Trade Minister Simon Harris emphasized Europe’s desire for dialogue, stating, “This is a trading relationship that matters, and Europe has been very clear: we are up for a deal.” European counter tariffs that could in turn lead to further escalation could be harmful for the big pharmaceutical exporter.
Not the first trade war
Niclas Poitiers, Research Fellow at the Bruegel think tank in Brussels, is confident that Europe will rise to the challenge. “Although not on the same scale, we’ve fought a number of trade wars, and the EU knows how to navigate these situations,” he says. Poitiers points to Brexit as a prime example, where EU member states learned that standing united put them in a stronger position than fighting individually.
Monday’s meeting was therefore all about strategy, says one EU diplomat. When to hit back, what sectors to target and how, rather than losing time with each capital declaring what industries they want to protect.
Possible countermeasures
So, what might these countermeasures look like? One potential package is already on the table and set for a vote this Wednesday by EU member states. This package serves as the EU’s official response to the first round of US tariffs on aluminum and steel back in March, and it includes duties on high-profile products such as Levi’s jeans and bourbon whiskey. The proposed tariffs could impact up to $28 billion (€25.7 billion) worth of American imports — ranging from chewing gum and toilet paper to diamonds and dental floss, according to a recent Reuters report.
If approved, the first set of countermeasures would take effect on April 15th, and the second round of measures on May 15th, in accordance with the WTO’s requirement for a 30-day gap between actions.
Economist Alcidi explains that this initial package is designed to limit the impact on European consumers, aiming to limit sharp price hikes, while still sending a clear message that the EU is prepared to retaliate firmly.
Tariffs on services
Additional measures could take things even further. Some are advocating for the use of the Anti-Coercion Instrument (ACI), a newly introduced and highly potent tool in the EU’s arsenal. The ACI came into effect in December 2023 but has yet to be used. This instrument allows the EU to go beyond traditional countertariffs on goods and extend its reach to services, among other areas.
US digital services, such as Microsoft and Netflix, have substantial consumer bases in Europe, meaning that trade restrictions could significantly impact American companies. In fact, when considering services alone, the US faced a trade surplus of €109 billion ($118.9 billion) with the EU in 2023 — a detail often overlooked by the US administration when discussing “unfair” trade imbalances.
Important weeks ahead
The coming weeks will reveal the EU’s path forward. Researcher Niclas Poitiers emphasizes that European retaliation should target American vulnerabilities — hitting the US where it hurts — without inflicting excessive harm on Europe itself. “The best approach is through partnerships, coordinating with other countries,” he notes.
Both researchers agree that in a trade war, there are no long-term winners. “It’s a lose-lose situation,” concludes Alcidi. She suggests that Europe’s focus should shift towards building its own capacities, ensuring greater economic security and strategic autonomy in the future.
Edited by: M. Cavanagh
