The EU is thinking about imposing tariffs on US exports, particularly aircraft and automobiles, to persuade Donald Trump to lift existing and planned tariffs targeting the EU.
This new list includes Boeing and other categories of US exports, like chemicals, electrical items such as cameras, health-related products, and food items like sweet potatoes and nuts.
Meanwhile, Brussels is consulting with member states about possibly litigating against the US regarding the 20% tariffs on blankets that Trump announced last month.
This proposal emerged just before Trump was set to announce a tariff agreement with the UK, and shortly after European trade commissioner Malossyvchovich stated that the EU wouldn’t be coerced into an unfair trade deal and was preparing for a backup plan should current talks fail.
The EU is adding this to the 21 billion euro retaliatory tariff list revealed last month, which included taxes on items like Harley Davidson motorcycles, poultry, and clothing, although these actions were later put on hold.
Boeing, based in Seattle, could be particularly affected, but Ireland might also face tariffs, including potential US taxes on pharmaceutical exports.
Also, Irish budget airline Ryanair could see increased costs as it’s placed about $30 billion in orders for 330 aircraft set for delivery by 2034. The airline has hinted at possibly cancelling these orders and looking for alternatives, including Chinese manufacturer Comac.
Aercap, the largest aircraft leasing company, is also located in Dublin.
If the EU imposes new tariffs, they would be applicable from the aircraft’s delivery date, impacting advance orders, as confirmed by EU officials.
Officials noted they aren’t pursuing “dollar-for-dollar” retaliations against existing tariffs on steel, aluminum, and cars, but they must brace for the possibility that some of Trump’s tariffs could persist in the long run.
There was also mention of possibly expanding the threat to services that may involve obligations from companies like Microsoft and Meta. One senior official indicated, “That’s still an option we have. It could be part of the mix.”
Brussels started consultations that will last four weeks, ending June 10, just before Trump’s 90-day suspension of universal mutual tariffs, which he stated would set specific categories and potential tariff rates by early July.
Officials clarified that they don’t foresee imposing tariffs in sectors like automobiles, where Trump’s tariffs have already reached 25%.
“We can opt for higher tariffs on lower trade volumes or lower tariffs on larger volumes, managing the trade impact accordingly,” remarked a civil servant.
The introduction of these tariffs is intended to heighten tensions in EU-US negotiations, although officials say it’s more about “rebalancing” than direct retaliation.
Previously, the EU mentioned aiming for “smart tariffs” that target areas that might hurt US interests, particularly in Republican-voting states and bourbon products.
Current tariffs on cars, beer cans, and steel and aluminum have shifted the terms of transatlantic trade significantly.
If Trump cannot be swayed, particularly before his summer break in August, and if some or all tariffs remain, these new tariffs could enable a “rebalancing of trade relations,” according to officials.
The aircraft and automotive sectors rank among the most significant exports on the new list, with US aircraft sales to EU airlines and leasing companies projected to reach about 10.5 billion euros in 2024. Similarly, US automobile and auto parts exports amounted to 12.5 billion euros in the same timeframe, while machinery exports were around 12 billion euros.
Additionally, Thursday’s list included electrical equipment, like computer screens and cameras, valued at 7.2 billion euros, and agrifood products worth 6.4 billion euros annually.
