EU and U.S.: Trade Tensions Escalate Amid Tariff Threats

The European Union is intensifying its consideration of counter-measures against the United States as strained trade negotiations show little promise of resolution, according to EU diplomats.

A growing number of EU nations, including Germany, are now contemplating the use of comprehensive 'anti-coercion' measures, which would enable the bloc to target U.S. services and other sectors in lieu of a favorable trade deal. Previously, the EU appeared on a path to an agreement wherein a 10% U.S. tariff on most exports would remain with some concessions, but aspirations dimmed after President Donald Trump threatened a potential 30% tariff by August 1.

Following negotiations between EU Trade Commissioner Maros Sefcovic and U.S. officials in Washington, where conflicting solutions were presented, no clear path has emerged. Prospects of alleviating existing tariffs on steel, aluminum, cars, and car parts seem limited, and the 'nuclear option' of using the EU's anti-coercion instrument gains consideration. This comes as European Commission President Ursula von der Leyen emphasizes that such measures are reserved for extraordinary situations.

(With inputs from agencies.)