EU diplomats say the European Union is considering a wider array of possible retaliatory actions against the United States as the chances of negotiating a mutually agreeable trade deal with Washington continue to decline. Germany is among the growing number of European Union members who are in favour of the employment of broad “anti-coercion” measures, frustrated by the deadlocked negotiations and the mounting threat of tariffs from the United States. In the event that an agreement cannot be reached, these would allow the EU to target important U.S. industries like services. The change highlights the escalating tensions and the EU’s preparedness to take swift action if negotiations break down.
Shift Toward “Anti-Coercion” Measures
Germany is among the numerous EU members who currently support the implementation of extensive “anti-coercion” measures. If talks don’t result in a workable trade agreement, these powers would enable the EU to target U.S. services and other vital industries.
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Initial Progress Derails Amid Tariff Threats
In trade negotiations, the European Commission, which speaks for all 27 EU countries, had been working towards a deal. With few exemptions, the EU would agree to a 10% U.S. tax on the majority of its exports under this provisional agreement.
Since U.S. President Donald Trump threatened to increase tariffs to 30% by August 1, that effort has fallen apart. Meeting with U.S. officials in Washington last week, EU Trade Commissioner Maroš Šefčovič said the planned tariff would “practically prohibit” transatlantic trade. According to diplomatic sources, he expressed his worries in a report to EU ambassadors last Friday.
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Conflicting Signals from Washington
According to diplomats, Šefčovič’s conversations in Washington showed that U.S. authorities were not in agreement. There was a wide range of suggested remedies; some called for a baseline tariff rate significantly higher than 10%.
Every interlocutor seems to have a distinct viewpoint. Nobody can tell Šefčovič what would work with Trump in reality,” a diplomat said.
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Standstill Agreement Rejected
In order to stop further duties from being imposed after a deal is struck, the EU had suggested a “standstill” clause. Washington, however, turned down this request, claiming that Section 232 trade regulations raised national security issues. These studies look into important industries like semiconductors, medicines, and lumber.
According to U.S. officials, no deal can limit Trump’s power on issues of national security.
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European Union Signals Readiness to Retaliate
The tone among European Union countries is changing as negotiations stall. The bloc is getting ready for more forceful reactions, even though a diplomatic settlement is still the ideal course of action.
Currently on hold until August 6, the European Union has a tariff proposal aimed at €21 billion ($24.5 billion) in U.S. imports. Another round of actions is being considered, which might impact US exports worth €72 billion.
Given how severe the trade dispute is, some officials have referred to these possible measures as the European Union’s “nuclear option” in the event that negotiations fail.