EU would rather negotiate Trump tariffs, but will start collecting retaliatory duties in a week

Luxembourg: The European Union said on Monday it would start collecting retaliatory duties on some imported US goods next week, as EU trade ministers agreed they preferred negotiations to remove tariffs imposed by President Donald Trump over retaliation.

The 27-nation bloc faces 25 per cent import tariffs on steel and aluminium and cars and "reciprocal" tariffs of 20 per cent from Wednesday for almost all other goods under Trump's policy to hit countries he says impose high barriers to US imports.

Ministers overseeing trade met in Luxembourg on Monday to debate the EU's response, as well as discuss relations with China. Many said the priority was to launch negotiations and avert an outright trade war.

"We need to remain calm and respond in a way that de-escalates. The stock markets right now show what will happen if we escalate straightaway. But we will be prepared to take countermeasures if needed to get the Americans at the table," Dutch Trade Minister Reinette Klever told reporters.

European Commission President Ursula von der Leyen told a press conference in Brussels that the EU stood ready to negotiate a "zero-for-zero" tariff pact for industrial goods.

"Sooner or later, we will sit at the negotiation table with the US and find a mutually acceptable compromise," EU Trade Commissioner Maros Sefcovic told a news conference.

He also said the EU would start would start collecting a first tranche of targeted retaliatory duties on US imports from April 15 and a second wave from May 15, in reaction to the US tariffs on European steel and aluminium.

EU ready to fight back if needed

He also made clear that while preferring to negotiate the removal of the tariffs with the US, the EU was ready to step up its response. This could include the EU's Anti-Coercion Instrument (ACI), which would allow it to target US services or to limit US companies' access to public procurement tenders in the EU.

"We are prepared to use every tool to protect single market," he said, echoing the views of French Trade Minister Laurent Saint-Martin.

But some EU countries, particularly exposed to trade with the United States, urged caution. Irish Foreign Minister Simon Harris described the ACI as "very much the nuclear option" and said he believed most EU countries were not ready to go near it, at least for now.

Outgoing German Economy Minister Robert Habeck said the EU should realise it was in a strong position - if it was united.

"The stock markets are already collapsing and the damage could become even greater ... America is in a position of weakness," he said in Luxembourg. Habeck added that Trump lieutenant Elon Musk's hope of zero tariffs between Europe and the United States reflected this point.

The EU is likely to approve this week an initial set of countermeasures on up to $28 billion of US imports ranging from dental floss to diamonds, in response to Trump's steel and aluminium tariffs rather than the broader reciprocal levies.

But even that move has proven fraught, with Trump threatening a 200 per cent counter-tariff on EU alcoholic drinks if the bloc goes ahead with an earmarked 50 per cent duty on US bourbon. France and Italy, major exporters of wine and spirits, have expressed concern.

The 27-nation bloc is expected to produce a larger package of countermeasures by the end of April, as a response to US car and "reciprocal" tariffs.

However, in a war of tariffs on goods, Brussels has less to target than Washington, given US goods imports into the EU totalled 334 billion euros ($366.2 billion) in 2024, against 532 billion euros of EU exports.