EU Prepares Tariff Response to Potential U.S. Trade Restrictions

The European Union began strategizing retaliatory tariffs on U.S. goods, potentially targeting up to €400 billion in imports, in response to anticipated U.S. trade restrictions under President Donald Trump’s second term. 

While a specific €100 billion tariff package has been mentioned in discussions, no confirmed figure has been finalized. The EU’s move follows Trump’s April 2025 announcement of 25% tariffs on imports from Canada and Mexico, with threats of broader duties to address a $1 trillion U.S. trade deficit. The EU, a major U.S. trading partner with €1.2 trillion in annual trade, aims to protect its economic interests.

The proposed tariffs could target U.S. agricultural products (soybeans, corn), energy exports (liquefied natural gas), and consumer goods (automobiles, pharmaceuticals). The EU’s strategy, led by the European Commission, involves compiling a list of goods to pressure the U.S. without escalating into a full trade war. In 2018, similar U.S. tariffs on EU steel and aluminum prompted €2.8 billion in retaliatory duties on American whiskey and motorcycles, costing U.S. firms $1.6 billion. The current plan draws on that playbook but scales up to match the magnitude of Trump’s proposals.

The EU faces internal challenges, with member states like Germany, reliant on U.S. markets for 10% of its exports, urging caution to avoid harming consumers. The bloc is also navigating reduced U.S. support for Ukraine, which could strain transatlantic relations. Discussions with G7 allies, including Canada, aim to coordinate responses, while the EU explores exemptions for critical sectors like semiconductors. The tariff preparations signal a tense trade landscape, with potential impacts on global supply chains and inflation if negotiations fail by mid-2025.