The European Union is gearing up to impose retaliatory tariffs on the United States, targeting American goods with duties of up to 25%, in response to a broad set of US tariffs introduced last week, according to a Reuters report citing informed sources. The European Commission, the EU’s executive arm, has drafted a confidential document detailing these countermeasures and has circulated it to member states for approval, signaling a potential escalation in transatlantic trade tensions.
The proposed EU tariffs come on the heels of US President Donald Trump’s announcement on April 2, dubbed “Liberation Day,” when he unveiled a sweeping tariff regime affecting 185 countries. The US policy imposes a baseline duty of 10% on all imported goods, with higher “reciprocal” rates for specific nations: 20% for EU countries, 34% for China, 26% for India, 25% for South Korea, 24% for Japan, and 10% for Great Britain. The steepest duties target smaller economies, including Lesotho and the French territory of Saint Pierre and Miquelon at 50%, Cambodia at 49%, Laos at 48%, Madagascar at 47%, and Sri Lanka and Myanmar at 44% each.
Notably, the EU’s retaliatory plan spares American whiskey from import duties, a decision that could provide relief to an industry previously battered by trade disputes. During Trump’s first term, a 25% EU tariff on US whiskey—imposed in 2018 in response to US steel and aluminum tariffs—caused exports to plummet by 20%, from $552 million to $440 million between 2018 and 2021, according to the Distilled Spirits Council of the United States (DISCUS). Exports rebounded to $705 million in 2023 after a suspension of those tariffs, but the threat of renewed duties had loomed large until this exemption surfaced.
EU Trade Commissioner Maroš Šefčovič underscored the stakes, noting that US tariffs impact €380 billion ($413 billion) in EU exports to the United States—more than 70% of the bloc’s total exports to its largest trading partner. “These measures threaten the foundation of our economic relationship,” Šefčovič said in a statement last week. “We are prepared to defend our interests while remaining open to dialogue.”
Trump’s tariffs, which took effect April 9, build on earlier measures, including a 25% duty on steel and aluminum imports announced in March and a 25% tariff on auto imports from all countries except Canada and Mexico. The White House has framed these policies as a means to address trade imbalances, with Trump claiming at an April 2 Rose Garden event that the US had been “taken advantage of for too long.” The administration’s formula for “reciprocal” rates—allegedly based on trade deficits divided by export values, halved for leniency—has drawn skepticism from economists who warn of inflationary pressures and supply chain disruptions.
The EU’s response mirrors actions taken by other US trading partners. Canada, the largest supplier of aluminum to the US, has already announced countermeasures, while China has signaled readiness to escalate its own tariffs beyond the existing 34% rate, which compounds a prior 20% duty. The cascading retaliations have rattled global markets, with the S&P 500 dropping 2.47% in after-hours trading following Trump’s announcement, according to financial reports.
European Commission President Ursula von der Leyen emphasized a dual-track strategy on April 1, said according to Al-Jazeera, “We have a strong plan to retaliate if necessary, but our preference is to negotiate a solution.” Posts on X reflect a mix of alarm and defiance among European observers, with some predicting a broader trade war that could ensnare US tech giants—a sector von der Leyen hinted could face duties if tensions escalate further.
The US-EU trade relationship, the world’s largest, supports millions of jobs on both sides of the Atlantic. In 2024, the US imported $576 billion in goods from the EU, while exporting $367 billion, per US Trade Representative data. The EU’s €26 billion ($28 billion) retaliatory package, if approved, would mark a significant counterpunch, though it pales in comparison to the €380 billion in exports now under US tariff pressure.
As member states deliberate, the clock is ticking. The EU aims to finalize its measures by mid-April, potentially delaying an initial March 31 deadline to refine targets and allow for last-ditch talks. “Tariffs are taxes—bad for business, worse for consumers,” von der Leyen said, echoing a sentiment shared by industry leaders like DISCUS CEO Chris Swonger, who urged swift resolution to protect American whiskey’s rebound.
With Trump threatening further action—including a 200% tariff on European wine and spirits announced March 13—the transatlantic trade spat risks spiraling into a full-blown economic conflict, testing the resilience of global supply chains and the patience of consumers already bracing for higher prices.
