What can the EU do in opposition to Trump’s commerce warfare? – DW – 03/28/2025 | EUROtoday

US President Donald Trump claims tariffs is his “favorite word.” Across the Atlantic, in the meantime, the European Commission has described Trump’s commerce coverage as “an act of economic self-harm,” and is making ready its reponse.

In the rising commerce warfare with the US, Brussels is treading a fragile steadiness of attempting to look sturdy, whereas additionally protecting its conventional ally on facet.

The EU’s high commerce official, Maros Sefcovic, believes Trump might impose a sweeping 20% tariff on all EU items imported into the US by early April, considerably rising the price of European merchandise. It nonetheless stays unclear whether or not the US will goal particular person international locations or the EU as a bloc.

Any new tariffs can be along with the 25% tariffs already imposed on EU metal and aluminum imports, in addition to separate tariffs on the European automotive sectorthat have been carried out over the previous few months.

The EU has a number of instruments at its disposal because it balances having a consequential response, whereas minimizing the affect and disruption to its personal residents and shoppers.

Restrictions on companies

The EU Commission could take into account a big escalatory transfer by focusing on the US service sector. This might contain limiting mental property rights for US firms working within the EU.

For occasion, the EU may restrict firms like Apple and Google from charging for cloud-storage companies or operating-system updates. There can be dialogue about stopping Elon Musk’s Starlink satellite tv for pc community from competing for European authorities contracts.

In phrases of commerce, the EU had a big items surplus with the US, valued at €157 billion ($170 billion) in 2023, which means it imports extra from the US than it exports. However, in companies, the US recorded a surplus, tilting the steadiness with a €109 billion acquire for the EU.

Europe’s retaliatory tariffs so far have been largely symbolic, focusing on American-made merchandise like Harley Davidson bikes and denim denims. With these merchandise already affected, new tariffs would want to focus on different sectors.

All retaliatory measures require settlement from a professional majority of EU international locations, complicating the political panorama in Brussels. For instance, France has known as for a suspension of tariffs on bourbon whiskey to guard its wine sector from potential US retaliation.

The EU’s anti-coercion instrument

A essential situation is whether or not Brussels will make the most of the EU’s Anti-Coercion Instrument (ACI) — a mechanism created in 2023 in response to China’s block on Lithuanian imports over its assist for Taiwan.

The ACI, known as Europe’s “trade bazooka,” affords a broad vary of instruments for the EU if it determines Trump’s commerce method quantities to “economic coercion.”

It might even enable the EU to limit US banks working within the bloc, revoke US patents, or restrict income entry for on-line streaming companies.

Using the ACI has been advocated by outstanding figures in European commerce, together with former EU Trade Commissioner Cecilia Malmström, and Ignacio García Bercero, who beforehand led the EU facet of the EU-US commerce negotiations throughout the Obama period.

Under the ACI, there’s scope to focus on “natural or legal persons connected to the government,” doubtlessly affecting figures near Trump, corresponding to Elon Musk.

Targeting US Big Tech

In addition to tariffs, there’s dialogue of implementing different EU legal guidelines to focus on main US tech firms. Experts counsel the EU might impose strict penalties below the Digital Services Act (DSA) and Digital Markets Act (DMA), corresponding to hefty fines for social media platforms that fail to promptly take away disinformation.

The EU is already investigating the promotion of far-right content material throughout European elections on Musk’s platform X and will pursue this vigorously.

Trump’s administration and its allies have steadily argued that EU legal guidelines just like the DMA and DSA operate as tariffs on US tech companies because of the monetary burdens they create.

The EU may also leverage the ACI to ban the sale of ads on X, prohibit paid subscriptions, and forestall public authorities from posting info there.

Many economists and commerce consultants do warn, nonetheless, that such measures in opposition to US tech giants might considerably escalate tensions between the EU and the US and negatively affect European residents.

Edited by: Uwe Hessler