Give in to Donald Trump's demands. In the letter just delivered to the EU, Trump opens up the possibility of a"modification" to the 30% tariffs on all exports from the Old Continent if the Twenty-Seven eliminate "tariff and non-tariff policies and trade barriers" that he says are harming the US. Or respond with countermeasures, which could, however, trigger an escalation, given that Washington is threatening further increases if there are reactions. This is the dilemma that Ursula von der Leyen will have to resolve, weakened by the European Parliament's vote of no confidence, which revealed a collapse in her support. In the heat of the moment, the Commission President repeated the mantra that European officials have been reciting for weeks: we continue to negotiate – even if the negotiations led by Commissioner Maros Sefcovic have so far not brought results – but if necessary “we will take all necessary measures to safeguard the interests of the EU”.
Bow to blackmail? – Accepting the tycoon's confusing conditions for reconsidering his decision seems out of the question, given that the US objections are not based on any real facts. The" long-term trade deficits" generated – according to the White House's objections – "by your tariff and non-tariff policies and your trade barriers" are questionable when one considers that, looking at services alone, Washington on the contrary boasts (2024 data) a surplus of almost 150 billion euros. The tariff barriers are very low: the average effective tariffs applied on US goods amount to approximately 1%, according to the Commission. The VAT, which Trump considers a tariff, is neutral and does not distort competition between EU and imported products in any way. The only area where there is room for negotiation is non-tariff barriers: regulatory, bureaucratic, or technical obstacles such as sanitary and phytosanitary standards (which, however, are designed to protect consumer health), labeling requirements, and environmental regulations. And then, even if they are not strictly speaking trade measures, the Digital Services Act and the Digital Markets Act, which Washington believes impose excessively stringent restrictions on large digital companies. The Office of the United States Trade Representative and the US Department of Commerce consider them"discriminatory" against US multinationals.
Trade Countermeasures – If, however, a strong response is decided, Europe's response to Trump's return of tariffs is already written. The countertariff package has been ready for weeks, accompanied by strategic weapons still on the shelf: sanctions against American Big Tech and limits on US investment in Europe, from infrastructure to services.
The plan, which had been put on hold until July 14th to make room for diplomacy, calls for targeted tariffs on iconic products from Republican strongholds. Among other things, the tariffs would include Harley-Davidson, Levi's jeans, peanut butter, blueberries, tobacco, cosmetics, and personal care products—products that were already targeted by Europe during the tycoon's first term. A second retaliatory package includes 25% tariffs on meat – from turkeys weighing more than 185 grams to liverwurst, including boneless cuts of beef from Kansas and Nebraska – soybeans, yogurt, dairy products, industrial goods such as stoves, ovens, freezers, and lawnmowers, footwear and clothing, and light electronics. Finally, lumber, a key economic pillar of Georgia, Virginia, and Alabama.
The tool to target digital groups – It is much less likely that Brussels will actually consider activating for the first time the anti-coercion mechanism launched in 2023 as a defense weapon against China. Dubbed a"bazooka" for its firepower, it would allow for, for example, a tightening of public procurement aimed at excluding American companies, the withdrawal of import licenses, a block on access to insurance and financial markets, and the exploitation of intellectual property rights. US groups could thus be prevented from monetizing services such as streaming or the use of their software. Using the mechanism, however, requires a qualified majority vote in the Council: 15 out of 27 countries representing at least 65% of the bloc's population must express their support.
