Hardline against Trump? EU plans to impose tariffs on 93 billion euros of US goods

The European Union is preparing to impose retaliatory tariffs on 93 billion euros (about 108 billion USD) worth of U.S. goods in response to President Trump’s threat to levy additional tariffs on eight European countries. This trade conflict, triggered by disputes over Greenland, could have a significant impact on both economies. According to a CCTV News report on the 19th, multiple EU countries are considering imposing tariffs on U.S. goods worth 93 billion euros or restricting American enterprises’ access to the European market. An EU diplomat revealed that if no agreement is reached between the EU and the U.S., the retaliatory tariffs will automatically take effect on February 6. On the 17th, Trump announced on social media that, starting February 1, a 10% tariff will be imposed on U.S.-bound products from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland. He stated that the tariff rate will rise to 25% starting June 1 until the parties reach an agreement for the U.S. to “fully and completely purchase Greenland.” In response, representatives from all 27 EU nations met on Sunday to start preparing countermeasures. EU leaders will hold an emergency meeting in Brussels later this week to discuss possible retaliatory actions. President of the European Council Antonio Costa stated on social media Sunday that EU nations stand united behind Denmark and Greenland and are ready to “withstand any form of coercion.” Retaliatory measures target key U.S. industries The EU has approved but suspended a retaliatory tariff list worth 93 billion euros, targeting American industrial goods, including Boeing aircraft, U.S.-made automobiles, and bourbon whiskey. Sources indicate that if Trump implements tariffs against the relevant countries in early February, the EU may allow these countermeasures to take effect. Besides tariffs, the EU is considering other retaliatory actions but will first seek a diplomatic solution. French Prime Minister Macron called Trump’s threat “unacceptable” and plans to urge the EU to activate its most powerful trade retaliation tool—the so-called anti-coercion instrument. This tool, which has never been used and primarily serves as a deterrent, can respond to deliberate coercion by third countries. Measures may include tariffs, new taxes on technology companies, targeted restrictions on EU investments, restrictions on access to certain parts of the EU market, or limits on companies bidding for European public contracts. Trade agreement faces stalemate The EU's most direct and substantial response is to suspend approval of the trade agreement reached with the U.S. last July, which still requires approval from the European Parliament. The European People's Party, the largest group in parliament, said it would join other parties in blocking approval of this agreement. Stefan Lofven, President of the Party of European Socialists, said in a statement Sunday, “President Trump has triggered an avalanche, threatening to destroy decades of transatlantic cooperation.” The group, the parliament’s second-largest, supports suspending the trade agreement and calls for the EU to consider using the anti-coercion tool. The trade agreement is widely criticized in Europe for being overly favorable to Washington. The EU agreed to eliminate nearly all tariffs on American products and accept a 15% tariff on most goods exported to the U.S., and 50% tariffs on steel and aluminum. The U.S. then expanded the list of products subject to the 50% tariff, adding hundreds of items containing these metals. Economic impact felt on both sides According to Bloomberg Economics estimates, if Trump implements the threatened full 25% tariff, exports from target countries to the U.S. could decline by up to 50%, with Germany, Sweden, and Denmark facing the greatest impact. Trump’s tariff threats could negatively affect the upward trend in European stock markets. Previously, European stocks performed better than American equities, and investors flocked to diverse sectors in the region, from defense to mining and chip equipment manufacturers. The prospects for the region have been boosted by increased fiscal spending in Germany, falling interest rates, and expectations of improved profits. U.S. Treasury Secretary Besant almost dismissed the EU’s threat to suspend last year’s tariff agreement with Trump, saying the U.S. president is using strategic leverage to get what he wants. On Sunday, he stated: “The Europeans are showing weakness; America is showing strength. European leaders will change their attitude—they will realize they need the protection of the American security umbrella.” Allied relations tested Notably, Trump issued these tariff threats after these countries—some of America’s oldest allies and all NATO members—sent only dozens of soldiers to participate in a joint planning exercise in Greenland. According to CCTV News, UK Prime Minister Starmer released a statement calling the U.S. threat to impose tariffs on multiple European countries “completely wrong.” Swedish Prime Minister Kristersson issued a written statement, saying “We will not be blackmailed. Only Denmark and Greenland can decide matters involving Denmark and Greenland.” U.S. Republican Senator Thom Tillis and Democratic Senator Jeanne Shaheen issued a joint statement urging the Trump administration to “close threats and open diplomacy.” As joint chairs of the Senate NATO group, they wrote: “Continuing down this path is bad for America, bad for American businesses, and bad for America’s allies.” NATO Secretary General Mark Rutte stated on social media Sunday that he had discussed the Greenland issue with President Trump and “looks forward to seeing him later this week in Davos.” Rutte is scheduled to meet with Denmark’s defense minister and Greenland’s foreign minister in Brussels on Monday. Risk Warning and Disclaimer The market carries risk; investments require caution. This article does not constitute personal investment advice, nor does it consider the special investment goals, financial situation, or needs of individual users. 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