- The EU is preparing a package of retaliatory tariffs on US goods worth up to €93 billion.
- The tariffs are a response to the US’s announcement of new tariffs.
- The measures are defensive in nature and are currently in the preparatory stage.
- The trade dispute is linked to political tensions surrounding Greenland.
Why is the EU planning tariffs on US goods?
The European Union is preparing to impose retaliatory tariffs on US goods worth a total of around €93 billion. These tariffs were supposed to be approved before, but their implementation was put on hold so as not to immediately trigger a larger trade dispute. Now, however, the situation is changing, as the US has threatened that it could impose 10 per cent tariffs on selected EU countries from 1 February and then up to 25 per cent from June if no agreement is reached in the Greenland dispute.
These threats from US President Donald Trump include countries such as Denmark, Germany, France, Sweden, Norway, Finland, the Netherlands and the UK, i.e. countries that have either sent their forces to Greenland or are opposing US demands.
European politicians have decided that tolerating such pressure would send the wrong message, and therefore want a retaliation package ready.
What action is the EU considering and what might it mean?
The main and most discussed option is tariffs of up to €93 billion on US goods. These could cover a wide range of products, from industrial to agri-food. This package has been prepared before, but the EU put its implementation on hold to give negotiations a chance yet. Now, if the US introduces its own tariffs, the EU could quickly include the package again.
In addition to this, the EU is also considering using the so-called Anti-Coercion Instrument. This is a tool to react when another country uses trade measures to force political decisions. It can not only be limited to tariffs, but, for example, limit the access of US companies to public tenders or investments in the EU.
For now, action is in the pipeline and talks between EU capitals and at emergency meetings of EU leaders. This shows that the conflict over the Atlantic may deepen and decisions will be made in the coming days or weeks.
