Why the EU takes no pleasure in hitting back at Trump’s tariffs

Good morning. Some non-trade war news to start: Top defence and tech executives have written to the leaders of the UK and EU in a letter seen by the Financial Times, urging them to sign a defence and security deal next month that would allow British arms companies to fully participate in Europe’s rearmament drive.

Last night, Donald Trump further stepped up his trade war by increasing tariffs on Chinese goods to 104 per cent. Here, Sweden’s trade minister tells our correspondent that EU retaliation on the tariffs will be painful in many ways, while our Rome reporter has news of a crackdown on Colosseum ticket touts.

The Union strikes back

Brussels will decide today whether to fire its first retaliatory shot against US President Donald Trump’s tariffs more in sorrow than anger, Sweden’s trade minister told Andy Bounds.

Context: EU member states will vote on whether to approve tariffs on about €21bn worth of US goods, in return for the 25 per cent duties on European steel and aluminium Trump imposed last month.

Stockholm has yet to decide which way it will vote, but as trade is a European Commission competence, it would take a qualified majority of member states to block the retaliation, which would take effect in three tranches in April, May and December.

Benjamin Dousa, trade minister in Sweden’s centre-right government, said his country favoured free trade — including the commission’s proposal to the US to mutually eliminate all tariffs on industrial goods.

“The US is one of our closest friends in the world. We want more trade,” Dousa said. “It is when goods, services, talents, entrepreneurs, and ideas move freely over the Atlantic that humankind has made the biggest leaps forward. New pharmaceuticals, more powerful robots, exciting software: all of this is possible when Europe and the US collaborate.”

However, Dousa backs the commission assessment that the US is not yet willing to talk seriously about dropping its 25 per cent tariffs on steel and aluminium and cars, plus 20 per cent on almost everything else.

“If we are forced to go forward with countermeasures, member states will support it,” he said.

EU trade commissioner Maroš Šefčovič will send his plan to retaliate against Trump’s so-called “reciprocal” tariffs early next week. 

“I think that if current trends continue, the list of countermeasures will be a lot longer,” Dousa added.

One question is whether the EU should use its so-called anti-coercion instrument (ACI) for the first time, which would allow it to hit US tech companies and even ban US consultancies from winning public procurement contracts.

“When considering using ACI we should be cautious,” Dousa said. “It is a broad instrument, and it has never been used before, so we have to analyse it carefully. But in principle, all options are on the table.”

“However, if we go too fast, if we don’t think this through thoroughly, we could hurt ourselves more than we hurt the US economy,” he warned.

Chart du jour: Replicant

In the race to create humanoid robots, China has a leg-up on the US, Europe and others because of its deep electronics and EV supply chains.

Tourist trap

Getting tickets for Rome’s historical landmarks might soon become much easier: Italy’s antitrust authorities are cracking down on ticket scalping, writes Giuliana Ricozzi.

Context: For years, tourists in Italy have struggled to find tickets for the most popular museums and monuments, as scalpers and resellers buy up entry passes in bulk and sell them on at a hefty mark-up.

Yesterday, Italy’s antitrust body issued a €20mn fine against one company and six tour operators that hoarded tickets for the Colosseum and forced visitors to buy them at higher prices, coupled with additional services.

The investigation was launched in 2023, after numerous tourists complained that it was impossible to find tickets for the Colosseum, Italy’s most popular monument, visited by about 12.3mn people each year.

CoopCulture, a company that managed the Colosseum’s official ticket sale until 2024, “contributed, in full knowledge, to the phenomenon of the serious and prolonged unavailability of Colosseum entrance tickets at base price”, the watchdog wrote in a press release. 

It said that CoopCulture turned a blind eye to tour operators using bots to buy regular online tickets in bulk, at the base price of €18. Those then reappeared on online retailers’ websites for €35 with a fake “skip the line” service, or €68 euro including a guided tour. 

This is not the first time authorities attempt to curb such ticket schemes. Last year, Italy’s financial police cracked down on a ticket scalping system targeting visitors of Florence’s Uffizi museum and the Galleria dell’Accademia.

What to watch today

1. Ukrainian premier Denys Shmyhal attends EU-Ukraine association council in Brussels.

2. European Commission president Ursula von der Leyen meets American Chamber of Commerce members.

3. The World Trade Organization holds a council on goods trade.

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