As Trump hits EU with tariffs, how can Brussles retaliate? – DW – 04/02/2025 | EUROtoday

US President Donald Trump on Wednesday introduced big new tariffs of 34% on imports from China and 20% on imports from the European Union — two of the principle US commerce companions.

Trump additionally stated {that a} baseline tariff of 10% could be imposed on imports from a variety of different nations.

Speaking within the White House Rose Garden, the US president stated that this was “Liberation Day,” which might “forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed.”

Across the Atlantic, in the meantime, the European Commission has described Trump’s commerce coverage as “an act of economic self-harm,” and is getting ready its reponse.

In the rising commerce struggle with the US, Brussels is treading a fragile stability of attempting to look robust, whereas additionally preserving its conventional ally  on facet.

Any new tariffs could 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 applied 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 influence and disruption to its personal residents and customers.

Restrictions on companies

The EU Commission could contemplate a major escalatory transfer by concentrating on the US service sector. This might contain proscribing mental property rights for US firms working within the EU.

For occasion, the EU would possibly 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 major 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 stability with a €109 billion achieve for the EU.

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

All retaliatory measures require settlement from a certified majority of EU nations, 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 vital difficulty 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 help for Taiwan.

The ACI, known as Europe’s “trade bazooka,” gives 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 distinguished 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 may be 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 may be dialogue of implementing different EU legal guidelines to focus on main US tech firms. Experts counsel the EU might impose strict penalties beneath 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 ceaselessly argued that EU legal guidelines just like the DMA and DSA operate as tariffs on US tech corporations as a result of monetary burdens they create.

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

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

This article was first revealed on March 29, and up to date following Donald Trump’s tariffs announcement on April 2.

Edited by: Uwe Hessler