European officials approve retaliatory tariffs against US

The new tariffs would take effect in phases starting April 15, and would affect about $23 billion) worth of goods.

Brussels: The European Union voted Wednesday to approve its first retaliation measures in response to President Donald Trump’s tariffs, moving closer to placing increased duties on a range of manufactured goods and farm products including soybeans and corn.

The new tariffs would take effect in phases starting April 15, and would affect about 21 billion euros ($23 billion) worth of goods.

The final list responds to Trump’s steel and aluminum tariffs and is a slightly trimmed-down version of one that was announced in mid-March.

EU officials have spent recent weeks consulting with policymakers and industries from across the 27-nation bloc, trying to minimize harm on Europeans.

The EU did not immediately publish an official version of the final tariff list, but one had been circulating among member states before the vote. Tariffs would range from 10% to 25%, based on that document, and would apply to a wide range of products including foodstuffs such as peanut butter and manufactured goods such as hair spray.

But European leaders have been clear that the goal was to maximize the impact on the United States — hoping to prod Americans toward a negotiating table — while limiting the pain for consumers and companies across Europe.

The final list is expected to exclude bourbon, for instance, after Trump threatened to place a 200% tariff on all European alcohol in response to its inclusion. That would have been a crushing blow for wine producers in France, Italy and Spain.

“They’re not really going for full confrontation,” said Carsten Brzeski, an economist at ING, noting that the response will come only slowly.

He said that for the European economy, that “measured” style could limit the fallout, while leaving political room for negotiating. He said that varied national interests, and a desire not to crush sectors that are important national priorities, could prevent a more aggressive approach — like the one China is taking.

“Any actions that they take may have costs for the European economy as well,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics.

Nearly all EU nations voted for the final plan, with only Hungary casting a “no” vote.

While European leaders have been clear that they want to negotiate, they have also emphasized that it is important to display their economic strength as the United States wages a deepening trade battle.

Since last month, the United States has introduced tariffs of 25% on European steel, aluminum and cars. Last week, it imposed a broad 20% tariff on everything else coming from Europe, a tax that took effect Wednesday.

EU officials have attempted to lure their U.S. counterparts to the table to make a deal, and have even offered to cut tariffs to zero on cars and other industrial products if the United States does the same.

But serious negotiations have been slow to materialize.

“We are in the early stages of discussions because the U.S. views tariffs not as a tactical step but as a corrective measure,” Maros Sefcovic, the EU trade commissioner, said this week.

Given that, Europe is striking back in a staggered way, hoping to allow U.S. officials time to begin talks.

The new retaliatory tariffs mark a first step, and come in response only to steel and aluminum levies. They will phase in slowly: Some duties will be collected starting April 15, others on May 15, and a small share will not kick in until Dec. 1, according to an EU official.

EU officials are expected to announce the next step, a plan to hit back at both the car levies and the 20% tariffs, as soon as early next week. Officials plan to lay out the suggested contours of the response, then consult with member states, and then to later vote on whether to go ahead.

As they push ahead with their methodical retaliation, European policymakers have insisted that all options are on the table, which means further measures could follow.

For instance, some national officials have suggested that Europe should use a new trade weapon that is often referred to as the EU’s “bazooka” to hit American service companies, including big tech firms such as Google.

Those measures have not been tried before, but they would potentially give Brussels a more powerful negotiating position: Europe buys more services from America than it sells. Europeans are critical to technology giants’ bottom lines.

Yet whether such an aggressive services retaliation will happen is still unclear. It would be difficult to design in a way that would not cost Europeans — who have come to rely on services like Google search and American cloud technology — and different European capitals have different appetites for retaliation.

“We want to negotiate,” Henna Virkkunen, an EU commissioner who oversees tech sovereignty, said during a news conference Wednesday when asked whether hitting back at American technology services would be the right approach.

“But of course, then, when needed, we have to also protect our industry,” she said. “And we are currently also preparing those measures.”