EU Warns of Countermeasures Over ‘Unacceptable’ US Tariff Threat
On Monday, the European Union expressed concerns over the US’s reluctance to finalize a trade agreement and issued a stern warning of potential countermeasures if no resolution is reached to avert the punitive tariffs threatened by President Donald Trump set to commence on August 1.
The EU has refrained from retaliatory actions thus far to prevent a further escalation in the ongoing trade dispute. However, there is growing apprehension as EU ministers signal a readiness to retaliate in response to the looming tariff threats.
EU Ministers’ Stance
Following a meeting in Brussels, Danish Foreign Minister Lars Lokke Rasmussen labelled the tariff ultimatum as ‘absolutely unacceptable.’ EU Trade Chief Maros Sefcovic expressed disappointment in the US’s reluctance to engage constructively, hinting at the possibility of countermeasures should negotiations fail.
Italy’s Foreign Minister Antonio Tajani disclosed that the EU has drafted a list of tariffs amounting to 21 billion euros ($24.5 billion) on US goods in case of a deadlock in negotiations.
Global Reactions and Preparations
Meanwhile, Mexican President Claudia Sheinbaum indicated optimism regarding an imminent security deal with the US. The White House clarified that the proposed 30% tariffs on Mexican imports would exclude goods under the USMCA agreement, easing concerns over the impact on trade.
European industries, particularly in Germany, are on edge following Chancellor Friedrich Merz’s remarks highlighting the detrimental effects of potential tariffs. German business leaders are urging swift action to mitigate the risks posed by escalating trade tensions.
European businesses, like Chianti wine producers in Italy, are already strategizing alternative export markets to cushion against potential trade disruptions.
Market Response and Negotiations
Despite the looming tariff threats, European stocks dipped, reflecting investor concerns over the uncertain trade environment. White House economic advisor Kevin Hassett confirmed ongoing trade discussions with the EU, Canada, and Mexico, emphasizing the need for improved agreements to avert the imposition of new tariffs.
As the August 1 deadline approaches, countries like South Korea are racing to secure trade deals to avoid punitive tariffs. South Korea’s Minister for Trade Yeo Han-koo expressed optimism about reaching a preliminary agreement with the US.
The evolving trade landscape underscores a critical juncture in global trade relations, with implications for various industries and economies worldwide.
