France urges EU to prepare strong response to possible tariffs from Trump - Bloomberg
Tariffs from Trump may provoke strong countermeasures from the EU (photo: Getty Images)
France has proposed that the European Union consider for the first time the possibility of using the most powerful trade influence tool in response to the US. This response would be possible if US President Donald Trump were to impose new tariffs on European countries, according to Bloomberg.
This refers to the so-called "counter-coercion tool," which is designed to strike back against countries or states that use trade and economic measures to influence political decisions.
According to "informed sources" cited by the Western edition, such measures must be on the table.
The US plans to introduce sharp tariffs on global partners as early as April 2.
As US President Trump previously stated, these tariffs are meant to address non-tariff barriers that he believes are unfair. The focus is on domestic regulations and how countries collect taxes, including the EU's value-added tax (VAT).
However, the European Union emphasized that the VAT within the bloc is a fair, non-discriminatory tax that is applied equally to both domestic and imported goods.
What does the trade instrument 'anti-dumping' mean
The so-called "anti-coercion instrument," which is subject to a series of conditions and steps, is expected to allow the European Union to implement a wide range of countermeasures, including:
- trade and service restrictions;
- restrictions on certain intellectual property rights, foreign direct investment, and access to public procurement.
The instrument was primarily designed to deter and, if necessary, respond to deliberate coercive actions by third countries that use trade measures as a means of pressuring the sovereign policies of the EU or its individual member states.
It is expected that countermeasures can only be used as a last resort and must be proportional to the level of damage caused, as stated in the Bloomberg report.
This tool was adopted as part of the EU's efforts to strengthen trade protection after the US imposed tariffs on the bloc's exports during Trump’s first presidential term.
Another factor was China's decision to impose restrictions on Lithuanian goods after Taiwan opened a trade office in the Baltic country.
Procedure for applying countermeasures and what nuances exist
The Commission may propose the use of the instrument, but then member states must determine if a coercive case exists and whether it should be applied.
Throughout the process, the EU will attempt to consult with the coercing party to find a solution and may also cooperate with like-minded partners facing similar pressures.
In March, US President Trump escalated the global trade war by imposing a 25% tariff on steel and aluminum imports, prompting the EU to announce its retaliatory tariffs on politically sensitive American goods worth up to 26 billion euros ($28.1 billion).
The future reciprocal tariffs, imposed on each trading partner, are expected to offset any anticipated disadvantages for American companies and could overshadow the metal tariffs, Bloomberg reports.
As another person speaking on condition of anonymity told Western journalists, the European Commission is currently not considering the coercion tool.
A second source told Bloomberg that any discussions regarding the use of the tool were distant since the EU must first see what tariffs the US will announce on April 2.
EU Trade Commissioner Maroš Šefčovič said on Wednesday that he had no details regarding the new US tariffs and that the Commission would need to continue preparations and maintain a flexible approach.
Because of this, it is not expected that the EU will immediately present its response to Trump's upcoming measures as quickly as it did in the case of the metals dispute, one source told Bloomberg.
Additionally, Šefčovič announced that the EU's response to the metal tariffs will be postponed until mid-April, allowing more time for negotiations with the US.
As previously reported, on March 20, the European Union postponed the introduction of the first retaliatory measures against the US over the metal tariffs imposed by Trump until mid-April. It is expected that this will allow time to determine which US goods should be subject to tariffs.
We also mentioned earlier that the EU had already taken countermeasures against the new US tariffs on metals. It was noted that Brussels was implementing its own tariffs on US goods worth 26 billion euros.
