EU Won't Retaliate To Trump's 30% Tariff, Countermeasures On Hold Until August

Authored by Jacob Burg via The Epoch Times,

European Commission President Ursula von der Leyen said on July 13 that the European Union will extend a suspension on its countermeasures to U.S. tariffs until next month while trade negotiations continue with the Trump administration.

On July 12, U.S. President Donald Trump said he will impose a 30 percent tariff on all imports from the EU absent a trade deal with his administration.

The tariffs would be separate from any sector-specific levies. He accused the EU of imposing various tariffs and non-tariff trade barriers on the United States and said he would increase the tariff level if Europe retaliates.

Trump had initially given U.S. trading partners until July 9 to negotiate trade deals with his administration or face the tariffs he announced in early April. Trump recently said he would begin sending letters to countries informing them of their tariff levels if they do not negotiate deals with his team.

He has sent letters to more than 20 U.S. trading partners, including Mexico, which received a letter on July 12 informing the nation that it would also have 30 percent tariffs imposed on its imports into the United States.

After Trump announced the EU’s new tariff level, von der Leyen said on July 12 that the EU, the United States’ largest trading partner, would take all necessary steps to safeguard its interests, including “the adoption of proportionate countermeasures if required.”

German Economy Minister Katherina Reiche called for a “pragmatic outcome to the negotiations” between the EU and the United States.

EU ambassadors met on July 13, one day ahead of the trade ministers’ meeting in Brussels, to decide whether to retaliate against Trump’s new tariffs or extend a suspension on countermeasures that was set to expire on July 14.

The EU opted to take the second route.

While speaking with reporters, von der Leyen said the suspension would extend until early August while the EU continues to “prepare further countermeasures” so it is “fully prepared.”

When Trump delayed the imposition of his reciprocal tariffs on U.S. trading partners until July 9, the EU also suspended an initial package of countermeasures to U.S. sectoral tariffs on steel and aluminum that would affect $24.6 billion in U.S. imports into Europe.

The EU was also preparing a second package of countermeasures since May that would target roughly $84.2 billion of U.S. goods, but the final list requires approval by all EU member states and has not yet been made public.

The bloc’s Anti-Coercion Instrument, which allows it to retaliate against nations outside of the EU that put economic pressure on member states to alter their policies, was not yet on the table, von der Leyen said.

“The [anti-coercion] instrument is created for extraordinary situations, we are not there yet,” she said.

Among the possible retaliatory steps the EU could take are restricting its market access to goods and services and other economic measures that include export controls, financial markets, and foreign direct investment.

On July 13, German Finance Minister Lars Klingbeil said the EU must take action against the United States if trade negotiations fail.

“If a fair negotiated solution does not succeed, then we must take decisive countermeasures to protect jobs and companies in Europe,” Klingbeil, who is also vice chancellor in his nation’s ruling coalition, told German media. “Our hand remains outstretched, but we will not go along with everything.”

Because the United States is its largest export market, Germany could face significant challenges from higher U.S. tariffs, particularly as it exports automobiles, automobile components, machinery, and pharmaceuticals into the United States.