EU may impose 30% tariffs on US goods amid trade dispute
Photo: Europe is preparing to hit the US with tariffs (Getty Images)
The EU plans to impose a 30% tariff on US exports worth about €100 billion ($117 billion) if the US does not abandon its intention to impose such tariffs after August 1, Bloomberg reports.
This is a response to President Donald Trump's threat to impose new tariffs on most EU goods.
A spokesperson for the European Commission said that the first wave of countermeasures would combine already approved duties of €21 billion and additional tariffs of €72 billion into one package.
American exports of industrial goods, such as Boeing airplanes, cars, and bourbon whiskey, are at risk.
The tariffs are due to take effect next month, but only if the US starts imposing its duties after August 1 and no agreement is reached between the parties.
According to the agency's sources, negotiations between the EU and the US will continue in August in the hope of avoiding an escalation.
After the news of possible tariffs was made public, the euro fell to $1.1723, and German bonds partially recovered their positions.
Blow from Germany
Amid the escalation of negotiations, Germany is even considering the possibility of using the so-called anti-coercion instrument (ACI), the EU's most powerful trade mechanism.
The ACI allows the EU to impose sanctions against countries that violate trade rules, including duties on American tech giants, restrictions on investment, and access to the European market.
However, the launch of this instrument is possible only with the support of a qualified majority of EU member states and is currently considered a last resort.
German Chancellor Friedrich Merz emphasized the need for a fair agreement with the United States with low tariffs.
He warned that without an agreement, Europe would face economic uncertainty that could harm the continent's development at a critical time.
Tariff agreements
Meanwhile, Trump has already signed tariff agreements with Japan and the Philippines, which provide for lower tariffs than originally announced.
In particular, the tariff on Japanese cars is 15%, which is less than the current rate of 25% for other major exporters, including the EU.
European leaders are actively discussing further steps during their visits to Tokyo and Beijing, where negotiations with Asia's largest trading partners are ongoing.
Most EU countries are currently inclined to continue negotiations with Washington to find a compromise and avoid an escalating trade war that could harm the global economy.
However, if the situation escalates after August 1, the EU is ready to take decisive action using the ACI.
Negotiations between the EU and the US should continue soon, and the international community is closely monitoring developments, as this could affect global trade flows and economic growth.
Trump's tariffs
Earlier, Trump announced his intention to impose a 30% duty on most goods imported from the European Union and Mexico starting August 1.
In a letter to European Commission President Ursula von der Leyen, he noted that trade relations with the EU unfortunately have been far from reciprocal.
In addition, the EU and the US are rushing to conclude a trade agreement by August 1 amid the threat of tariffs from President Donald Trump.
This comes amid Trump's threats to impose 30% tariffs on most European exports.
