EU to advance retaliation on US goods as tariff hike looms
The Commission said on Wednesday its primary focus was to achieve a negotiated outcome with the United States to avert 30% U.S. tariffs that U.S. President Donald Trump has said he will impose on the 27-nation bloc on August 1.
European Trade Commissioner Maros Sefcovic will speak with Lutnick from Brussels on Wednesday afternoon, the Commission said, before Commission officials brief EU ambassadors on the state of play.
The Commission said it would in parallel press on with potential countermeasures. It said it would merge its two sets of possible tariffs of 21 billion euros and 72 billion euros into a single list.
It added it would submit this to EU members for approval. No countermeasures would enter force until August 7. So far the EU has not imposed any countermeasures, agreeing to, but then immediately suspending, the first set in April.
Germany supports the EU readying countermeasures, a government representative said.
The Commission may be buoyed by the initial deal struck between the United States and Japan.
European shares climbed about 1%, led by automobile stocks, after Trump revived hopes for a trade deal with the EU following the U.S. agreement with Japan, which includes a 15% baseline rate.
One stand-out feature of the deal was that the same rate applies to cars, against the current U.S. tariff of 25%, something the EU may want for its similar level of auto exports.
In 2024, the U.S. imported more than $55 billion of vehicles and automotive parts from Japan. From the EU, the equivalent figure was 47.3 billion euros ($55.45 billion), with far fewer U.S. models sold into the EU or Japanese market.
EU official say Washington has shown little sign of budging over car tariffs, but the Japan deal could point the way.
The German government representative said U.S.-Japan relations were not comparable to those between the EU and the United States.
UBS analysts said it was difficult to make assumptions for a potential EU-U.S. deal, but did say that unless the EU secured an agreement, Japanese automakers would be at an advantage.
Volkswagen and BMW declined to comment.
EU diplomats were reluctant to provide early comments, instead saying they were picking through details of the U.S.-Japan deal, such as that Japan would buy more rice from the United States, but would keep existing tariffs on agricultural products.
Simon Evenett, professor of geopolitics and strategy at IMD Business School, said the 15% rate was lower than what Trump had recently threatened Japan with and it was notable that it appeared to apply to Japanese cars.
"Whatever the Japanese got will become the minimum for the EU negotiating objectives," he said.
($1 = 0.8524 euros)
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