EU prefers to talk than fight with Washington over Trump’s tariffs

European Union ministers broadly agreed on Monday to prioritise negotiations to remove tariffs imposed by President Donald Trump over retaliation even as it prepared a first set of targeted countermeasures.

The 27-nation bloc faces 25% import tariffs on steel and aluminium and cars and “reciprocal” tariffs of 20% from Wednesday for almost all other goods under Trump’s policy to hit countries he says impose high barriers to US imports.

Ministers overseeing trade met in Luxembourg on Monday to debate the EU’s response, as well as discuss relations with China. Many said the priority was to launch negotiations and avert an outright trade war.

“We need to remain calm and respond in a way that de-escalates. The stock markets right now show what will happen if we escalate straightaway. But we will be prepared to take countermeasures if needed to get the Americans at the table,” Dutch Trade Minister Reinette Klever told reporters.

European Commission President Ursula von der Leyen told a press conference in Brussels that the EU stood ready to negotiate a “zero-for-zero” tariff pact for industrial goods.

Talks with Washington to date have proven difficult. EU Trade Commissioner Maros Sefcovic described his two-hour exchange with US counterparts on Friday as “frank” as he told them their tariffs were “damaging, unjustified”.

The bloc is likely to approve this week an initial set of countermeasures on up to $28 billion of US imports ranging from dental floss to diamonds, in response to Trump’s steel and aluminium tariffs rather than the broader reciprocal levies.

But even that move has proven fraught, with Trump threatening a 200% counter-tariff on EU alcoholic drinks if the bloc goes ahead with an earmarked 50% duty on US bourbon.

France and Italy, major exporters of wine and spirits, have expressed concern.

The 27-nation bloc is expected to produce a larger package of countermeasures by the end of April, as a response to US car and “reciprocal” tariffs.

However, in a war of tariffs on goods, Brussels has less to target than Washington, given US goods imports into the EU totalled 334 billion euros ($366.2 billion) in 2024, against 532 billion euros of EU exports.

French Trade Minister Laurent Saint-Martin said there should be no taboos, including the EU’s Anti-Coercion Instrument (ACI), which would allow it to target US services or to limit US companies’ access to public procurement tenders in the EU.

“We cannot exclude any options on goods or services and, however we approach it, open the box to the European tool which is very comprehensive and which can be extremely aggressive,” he said.

Others, however, urged caution.

Simon Harris, foreign minister of Ireland, almost a third of whose exports go to the US, described the ACI as “very much the nuclear option” and said he believed the majority view in the EU was not to go near it, at least for now.

German Economy Minister Robert Habeck, whose Greens will not be part of the next governing coalition, said the EU should realise it was in a strong position - if it was united.

“The stock markets are already collapsing and the damage could become even greater ... America is in a position of weakness,” he said in Luxembourg. Habeck added that Trump lieutenant Elon Musk’s hope of zero tariffs between Europe and the United States reflected this point.

But he added, regarding countermeasures: “If we have every (EU) country coming out saying they have a problem here with red wine and there with whiskey and here with pistachios, then we will end up with nothing.”

Ursula von der Leyen said on Monday the EU had offered the United States a bilateral tariff exemption for cars and other industrial goods as it works to avert an all-out transatlantic trade war.

“We stand ready to negotiate with the United States. Indeed, we have offered zero-for-zero tariffs for industrial goods, as we have successfully done with many other trading partners,” she said.

“The offer was made long before and repeatedly, for example, in automotive sector,” she said, without providing a precise timeline.

She added that “there was not an adequate reaction” from Washington.

“Europe is always ready for a good deal. So we keep it on the table,” she said.

The commission later clarified that the offer was part of the ongoing negotiations between EU trade chief Maros Sefcovic and the US authorities.

Von der Leyen repeated Europe’s threat that should negotiations fail, the commission was “prepared to respond through countermeasures and defend our interests”.

She also vowed the EU would protect itself from a flow of cheap goods into bloc, especially from China, in an expected indirect impact from Trump’s extra levies.

Agencies