EU prioritises talks with US to get Trump’s tariffs removed

LUXEMBOURG - European Union ministers broadly agreed on April 7 that the bloc should prioritise negotiations to have

tariffs imposed by US President Donald Trump

removed over retaliation, even as it prepared a first set of targeted countermeasures.

EU trade commissioner Maros Sefcovic said the EU would start collecting a first tranche of duties on US imports from April 15 and a second wave from May 15.

The 27-nation bloc faces 25 per cent import tariffs on steel, aluminium and cars, and “reciprocal” tariffs of 20 per cent from April 9 on almost all other goods under Mr Trump’s policy to hit countries he says impose high barriers to US imports.

“We are prepared to use every tool in our trade defence arsenal to protect the EU single market, EU producers and EU consumers,” Mr Sefcovic told reporters after a meeting of the bloc’s trade ministers in Luxembourg on April 7.

He said the EU would not change its value-added tax (VAT) system, which he described as an important source of income for member states.

Mr Trump’s administration has said that VAT is an additional trade barrier.

“Sooner or later, we will sit at the negotiation table with the US and find a mutually acceptable compromise,” Mr Sefcovic said.

In view of the shift initiated by the US, Mr Sefcovic said it was time for the EU to “re-engage” in trade talks with China.

After the April 7 meeting, many EU ministers said the bloc’s priority was to launch negotiations with the US and avert an outright trade war.

“We need to remain calm and respond in a way that de-escalates. The stock markets right now show what will happen if we escalate straight away. But we will be prepared to take countermeasures if needed to get the Americans at the table,” Dutch Trade Minister Reinette Klever told reporters.

The bloc is likely to approve this week an initial set of targeted countermeasures on up to US$28 billion (S$37.6 billion) of US imports ranging from dental floss to diamonds, in response to Mr Trump’s steel and aluminium tariffs rather than the broader reciprocal levies.

But even that move has proven fraught, with Mr Trump threatening a 200 per cent counter-tariff on EU alcoholic drinks if the bloc goes ahead with an earmarked 50 per cent duty on US bourbon.

France and Italy, major exporters of wine and spirits, have expressed concern.

The European bloc is expected to produce a larger package of countermeasures by the end of April, as a response to US car and reciprocal tariffs.

However, in a war of tariffs on goods, Brussels has less to target than Washington, given US goods imported into the EU totalled €334 billion (S$493 billion) in 2024, against €532 billion worth of EU exports.

French Trade Minister Laurent Saint-Martin said there should be no taboos, including for the EU’s Anti-Coercion Instrument (ACI), which would allow it to target US services or limit US companies’ access to public procurement tenders in the EU.

“We cannot exclude any options on goods or services, and, however we approach it, open the box to the European tool, which is very comprehensive and which can be extremely aggressive,” he said.

Others, however, urged caution.

Ireland’s Foreign Minister Simon Harris described the ACI as “very much the nuclear option” and said he believed the majority view in the EU was not to go near it, at least for now.

Almost a third of Ireland’s exports go to the US.

German Economy Minister Robert Habeck, whose Green Party will not be part of the next governing coalition, said the EU should realise it is in a strong position – if it is united.

“The stock markets are already collapsing and the damage could become even greater... America is in a position of weakness,” he said in Luxembourg.

Mr Habeck added that Mr Trump’s lieutenant Elon Musk’s hope of zero tariffs between Europe and the US reflected this point.

But he added, regarding countermeasures: “If we have every (EU) country coming out saying they have a problem here with red wine and there with whiskey, and here with pistachios, then we will end up with nothing.” REUTERS, AFP