UPD: The EU has agreed on retaliatory tariffs. 26 union countries voted in favor, with only Hungary against. Most affected product groups will be taxed at a rate of 25%, some at 10%.
The European Union's response to the trade war initiated by Donald Trump may be less aggressive than expected, but creative and targeted, writes Politico, having reviewed the EU's proposals. Brussels is experimenting with a 'carrot and stick' approach to show that it does not intend to comply with Trump's demands while keeping the door open for negotiations. On Monday, the bloc proposed a 'zero for zero' tariff scheme on industrial goods, including cars, pharmaceuticals, chemicals, plastics, and machinery. Trump, however, stated that this offer was insufficient and urged EU countries to buy $350 billion worth of American energy products to make the trade deficit 'disappear... in one week'.
In response, a vote on new tariffs that will hit Republican voters the hardest is expected in the EU today.
Today, the EU will agree to impose tariffs of up to 25% on a wide range of US export goods worth about 22.1 billion euros, based on the volume of EU imports in 2024.
The list includes common agricultural and industrial goods such as soybeans, meat, tobacco, iron, steel, and aluminum — to strike at American industries most reliant on transatlantic exports.
According to an analysis of 2024 trade data conducted by the publication, EU tariffs will affect exports from 'red' states worth up to $13.5 billion.
The main target of the 'retaliatory tariffs' is soybeans, 82.5% of US soybean exports to the EU come from Louisiana, the home state of House Speaker Mike Johnson. The European Union has also targeted beef from Kansas and Nebraska, poultry from Louisiana, auto parts from Michigan, cigarettes from Florida, and wood products from North Carolina, Georgia, and Alabama. Tariffs will also hit ice cream from Arizona, handkerchiefs from South Carolina, electric blankets from Alabama, ties and bow ties from Florida, and washing machines from Wisconsin.
Pasta from Florida and South Carolina will also face tariff fire, with Italy likely eager to fill the market gap.
After the list is approved, the first set of tariffs on goods such as cranberries or orange juice, which the EU initially imposed in 2018 during Trump's first presidential term but suspended in 2021, will take effect on April 15.
Then, from May 16, 25% tariffs will begin on the second batch of imported goods, such as steel, meat, white chocolate, and polyethylene. From December 1, 25% tariffs on almonds and soybeans will come into effect.
The trade war initiated by Trump has been very costly for Washington, as Canada and China responded to the US president's tariffs with their own retaliatory tariffs. Overall, the retaliatory measures imposed by China, Canada, and the EU will hit US exports worth about $90 billion.