The European Union is preparing to impose countervailing duties on U.S. products worth 72 billion euros in response to escalating trade tensions with the United States. This move comes as a reaction to U.S. President Donald Trump's announcement of a 30% tariff on EU goods, set to take effect in August. Despite ongoing negotiations, the EU is readying itself for a potential breakdown in talks by drafting a comprehensive list of U.S. products that could face additional tariffs. This list includes items such as Boeing aircraft, automobiles, and bourbon, among others.
EU Trade Commissioner Maros Sefcovic revealed that while negotiations aim for a compromise, the EU has not ruled out the possibility of imposing these duties. The EU's initial countermeasure package, valued at 21 billion euros, was previously put on hold to avoid disrupting diplomatic efforts. However, with the looming threat of increased U.S. tariffs, preparations for a broader 72 billion euro package are underway.
The European wine industry has expressed concerns over the inclusion of wine in the potential retaliation list, warning that such measures could provoke a stronger U.S. response, harming both industries and consumers. Economists caution that Trump's tariffs could lead to significant disruptions in trans-Atlantic supply chains, impacting the U.S. economy with inflationary pressures and stalled growth.
Despite these tensions, the EU remains committed to pursuing a negotiated settlement to prevent a full-blown trade war. The EU's strategy underscores a delicate balance between responding to U.S. policies and maintaining economic stability, with hopes pinned on reaching an agreement by the August deadline to avoid mutual economic damage.
