On Thursday 8 May, the European Commission proposed new countermeasures in response to the so-called “reciprocal” US tariffs (20% reduced to 10% during the tariff pause) and those on vehicles and car parts that could be imposed if the talks fail. The institution does not stop there and suggests imposing export restrictions on certain European products destined for the United States. Finally, the Commission announced that it would be launching a dispute with the World Trade Organization (WTO) regarding tariffs.
While the Commission still hopes to reach an agreement with US President Donald Trump, it says it has realised that some US tariffs are very likely to remain, whatever the outcome of the talks.
American products targeted to the tune of €95 billion. The Commission is already preparing what happens next if negotiations with the US Administration fail, by submitting for consultation a list of US products that could be subject to additional tariffs, as we reported earlier this week (see EUROPE 13633/1).
There is no longer any question of following a “one euro for one euro” logic in devising counter-measures, but rather of adopting a “rebalancing” approach for the European economy, according to a senior European official.
The goods targeted affect €95 billion of US exports to the EU, although the US tariffs on the table affect some €380 billion. This prudential list protects European importers from tariffs that would be detrimental to them.
Industrial goods dominate the list of products that could be subject to tariffs. This includes aviation, for example, to the tune of €10.5 billion. The automotive sector is also targeted, as are batteries and electronic equipment of all kinds. Agri-food products are also included and wines, beers and spirits are once again threatened with customs duties, after the Commission removed them from its first list in April (see EUROPE 13617/2).
The selection of products is open to consultation until Tuesday 10 June. This is an essential process for the Commission, which wants to limit the damage to European importers. As a result, the list that could ultimately be proposed for adoption if talks with the United States fail is likely to be reduced after this consultation, as was the case with the first European countermeasures in response to the US aluminium tariffs.
Possible export restrictions. Less expectedly, the European Commission has also put forward the idea of imposing export restrictions on steel and aluminium scrap destined for recycling, as well as on certain chemical substances, when these products are exported across the Atlantic.
Details of the measures have not yet been released. This could take the form of tariff quotas or an export authorisation system. In any case, the list of products envisaged amounts to €4.4 billion worth of European products destined for the American market.
Recourse to the WTO. Finally, the Commission is brandishing the threat of a WTO dispute, even though it is still negotiating a solution with its American partner. It promises to officially request – in the coming weeks, according to a senior European official – WTO consultations with the United States on their so-called ‘reciprocal’ tariffs, and their tariffs on cars and car parts.
According to the same European official, negotiations with Washington remain the top priority. However, by taking its case to the WTO, the European Commission wishes to reaffirm that “internationally agreed rules matter, and these cannot be unilaterally disregarded by any WTO member, including the United States”, they argued, convinced that the US tariffs “blatantly violate fundamental WTO rules”.
The Commission can count on the support of the Chairman of the European Parliament’s Committee on International Trade, Bernd Lange (S&D, German), in its appeal to the WTO. “The EU must protect and uphold the multilateral trading system. Might does not make right in trade policy”, he declared. (Original version in French by Léa Marchal)