If negotiations fail, the EU unveils plans to retaliate against tariffs on U.S. products

The EU announced a plan on Thursday to increase pressure on the United States, hoping to prompt the Trump administration to conduct serious trade negotiations.

The European Union's executive branch, the European Commission, announced two major steps. Officials have raised a value of 95 billion euros (or $100.7 billion) that they can target with higher tariffs in retaliation for the duties announced or imposed by the U.S. They also said the group will launch a World Trade Organization dispute against the United States with comprehensive tariffs and tariffs on automobiles and auto parts.

Neither measure will take effect immediately. Instead, the European government will consult on the list of U.S. products that could reach higher tariffs next month. The proposed list includes some agricultural products such as soybeans, meat and bourbons, as well as finished products including sewing machines, aircraft parts and auto parts. It can also curb Europe's own exports of key chemicals used in food processing, as well as scrap metals.

The EU has not announced the tariff rate for these products. But if it follows its threat, Boeing could get attention, senior European officials acknowledged. American food companies may also be affected.

By posing a clear threat to the United States, the EU is posing a clear threat, which will be pending. European officials still want negotiations to avoid lasting tariffs, but there is no clear solution, even if President Trump announced an overview of a trade deal with the UK on Thursday afternoon.

“We believe that we should make money for the benefit of consumers and businesses,” said Ursula von der Leyen, President of the European Commission, in a statement announcing the plan. “At the same time, we continue to prepare for all possibilities, and the consultation presented today will help us to do this necessary work.”

European trade officials have met with Mr. Trump’s team in recent weeks, including Commerce Secretary Howard Lutnick. The president, speaking at the Oval Office within hours of the EU's announcement, said government officials “intention to reach an agreement with the group.”

“We found the EU treated us very unfairly,” Trump said. “We are currently dealing with them.”

EU officials are increasingly deviating from simply talking about how to retaliate, and are turning to talking about a long-term rebalancing of trade relations with the United States. It's a recognition that at least some new tariffs may remain the same for the long term.

The latest announcement from the EU comes after several fresh tariffs unveiled in the past few months.

The Trump administration has taken trade measures in phases: First, it imposes tariffs on steel and aluminum, then announces its use in automobiles and auto parts, and then announces comprehensive tariffs on different geographical locations. Those so-called “countdown” tariffs will impose a 20% tariff on goods entering the United States from the EU.

The group has taken some measures to respond. Last month, it approved plans for retaliation against tariffs on steel and aluminum, which will reach about $23 billion in U.S. goods.

But before the Trump administration announced it would suspend a 20% full tariff of 90 days, it would do so for only a few hours, only performing 10% of its duties at its location.

EU officials responded by suspending their first wave of retaliatory tariffs, a sign of goodwill. Meanwhile, officials also made it clear that they still plan to conduct wider retaliation if negotiations stagnate.

Thursday’s announcement indicated that these preparations were continuing.

While Thursday’s listing only deals with commodities, European officials are clear that if the trade struggle deepens, they could hit the U.S. service sector. This is a serious vulnerability for the United States, as European consumers are the main users of American technology, including cloud computing, search engines and social media.

But many officials see it as the last option.

For now, the EU has already been well aware that its goal is to negotiate, and if the deal is successful, retaliation can be avoided.

The goal is “if negotiations with the United States do not produce satisfactory results, then legal plans can be prepared.”