EU’s instant retaliation against Trump’s tariffs set to target US tech and banking
European officials have already drawn up their target list of American sectors for their counter-strike, taking aim at US financial services and big tech
BRUSSELS – The European Union is poised with “a strong plan to retaliate” against Donald Trump’s plan to impose sweeping tariffs on US imports from around the world.
Trump’s tariffs are expected to mark a massive escalation in his global trade war in what he is describing as America’s “liberation day”, with speculation that he could slap a universal 20 per cent levy on all imports.
But European Commission president Ursula von der Leyen has promised instant retaliation as she warned that Brussels had “a lot of cards” to fight the battle ahead.
EU officials have already drawn up their target list of American sectors for their counter-strike, taking aim at US banking services and big tech.
“We will approach these negotiations from a position of strength,” Von der Leyen told the European Parliament on Tuesday. “Europe holds a lot of cards. From trade to technology to the size of our market. But this strength is also built on our readiness to take firm counter-measures. All instruments are on the table.”
Trump has already slapped 25 per cent tariffs on imports of steel and aluminium, as well as cars and car parts.
His so-called “reciprocal” tariffs are aimed at punishing not only existing EU tariffs but also what it sees as non-tariff barriers such as EU tech regulations, its tax rates and its health and safety standards for farm products.
While the UK is unlikely to retaliate after the Office for Budget Responsibility warned that reciprocal measures would hit GDP and wipe out Rachel Reeves’s £9.9bn fiscal headroom by 2026, the EU stands ready.
Von der Leyen said that, unlike the US, the EU was ready to offset lost US trade with deeper ties with other markets.
“Our hallmark is not only that we are the biggest market in the world but that we are reliable and predictable,” she said. “We have the power to push back.”
Von der Leyen is widely backed in EU capitals, with French president Emmanuel Macron calling for Europe to be prepared for a “world of tariff wars” and European Central Bank president Christine Lagarde warning that leaders need to “stand ready for anything”.
“We do not necessarily want to retaliate, but we have a strong plan to retaliate if necessary,” Von der Leyen said.
The EU – which has an equivalent economic power to the US – retaliated within hours against Trump’s 25 per cent tariffs on steel and aluminium, targeting up to €26bn of American goods. But the bloc has so far held back on the 25 per cent tariffs on cars.
EU officials note that while the EU has a trade surplus in goods with the US, including cars, pharmaceuticals and food, the US also has a trade surplus in services, from finance to technology.
Retaliation could involve digital levies and stricter rules on Silicon Valley, as well as restricting banking and insurance access to the EU for Wall Street giants.
“Europe is far from powerless. Its long-standing ties with the US have played a crucial role in shaping America’s economic success and geopolitical dominance,” said Tobias Gehrke, a senior policy fellow at the European Council on Foreign Relations.
“With strategic influence across trade, finance, technology, and digital markets, Europe holds powerful cards that could counter Trump’s coercive tactics,” he added.
