As the countdown begins for Donald Trump's reciprocal tariffs on April 2, several of the United States' major trade partners are preparing countermeasures. The European Union, which shares a long-standing trade relationship with the US, is also working on its strategy to respond to fresh tariffs.
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Brussels, the EU's administrative centre, known for its tit-for-tat tactics in response to US tariffs, ensuring that their retaliatory actions match, but never exceed, the US administration's moves, is again gearing up for a similar strategy. In 2018, the target of the countermeasure was the iconic American brand Harley-Davidson, which saw a 25 per cent additional tariff on imports, while this year, the sights are set on big tech companies such as Elon Musk's social network X and search engine giant Google, as well as major financial institutions like J.P. Morgan and Bank of America. "America's tech giants, financial industry, and pharma companies have deep roots in Europe. Push too far, and Brussels could tighten the screws: digital levies on Silicon Valley, regulatory clamps on Wall Street, or taxes on US pharma exports," warned Tobias Gehrke, a senior policy fellow at the European Council on Foreign Relations.
European Commission President Ursula von der Leyen said in a speech to the European Parliament on Tuesday, April 1, "Europe holds a lot of cards. From trade to technology, to the size of our market. But this strength is also built on our readiness to take firm countermeasures. All instruments are on the table."
What makes the EU so confident with its countermeasures? Besides being a significant exporter of aluminium, automobiles, pharmaceuticals, and foods to the US, it is a prominent importer of US services, which puts it in an advantageous position in negotiations. The EU currently holds a modest trade surplus of around USD 50 billion, roughly 3 per cent of the total USD 1.7 trillion in annual transatlantic trade.
So, once Washington announces new and broader tariffs on the EU tomorrow, the latter will respond with counter duties hitting €26 billion in US goods exports, continuing its 'blow for blow' tactics.
Sure, April 2, 2025, will mark a significant escalation in the ongoing trade war, which the US first reignited in January, targeting Canada, Mexico, and China, with the comeback of Donald Trump in his 2nd Presidency term.
On Sunday, the US President already confirmed to impose a uniform global tariff with no exceptions on Wednesday, April 2, calling it a 'Liberation Day'. This sweeping tariff threat has prompted strong counterstrike warnings from several countries, including the EU.
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