The European Union will delay imposing its first tranche of retaliatory tariffs until next month to allow for more time to negotiate a deal with the United States.
President Donald Trump ended the EU’s exemption for U.S. steel and aluminum tariffs earlier this month via an executive order that also increased the duties applied to aluminum imports. The EU responded by announcing it would reimpose suspended duties at the end of the month on a slate of U.S. products, including 50% duties on whiskey, and tariffs on motorcycles, jeans and peanut butter.
A second wave of tariffs covering a larger list of products – including a slew of farm products like poultry, beef, dairy, nuts, eggs, sugar and vegetables – is slated to come into effect in mid-April after the Commission consults with member states.
But EU trade spokesperson Olof Gill said in a statement that the bloc has postponed the first wave of tariffs and would now aim to have both sets of retaliatory duties come into effect in mid-April.
Explaining the decision, Trade Commissioner Maroš Šefčovič said Thursday that the bloc is anticipating new U.S. duties to come into effect on April 2 – the day Trump has targeted for his “reciprocal” tariffs. Accordingly, he said he has been involved in ongoing discussions with U.S. officials to negotiate an off-ramp to the tariff escalations.
"I am engaging with my U.S. counterparts to better understand the U.S. plans and look for possible solutions," Šefčovič said during an EU hearing on U.S. trade relations Thursday. The delay "gives us extra time for negotiations to try to find a mutually agreeable resolution," he said.
Gill said that the delay would also allow the U.S. to refine the list of products facing retaliatory duties.
"Our goal is to strike the right balance of products, taking into account the interests of EU producers, exporters and consumers," he said, but added that the delay "does not diminish the impact of our response." The EU is still preparing to retaliate against U.S. exports worth around $28 billion, he said.
Trump has insisted that April 2 will serve as the start date for new reciprocal duties – referring to the day as “liberation day” in comments to reporters and online. The Washington Post reported Wednesday that aides are also preparing to impose new duties on that day.
But the administration has provided scant details on what those duties may look like. Treasury Secretary Scott Bessent told Fox Business this week that each country could receive a score based on a range of trade barriers and nonmarket behaviors that would be used to calculate a tariff rate.
“On 2 April, we will need to assess the action take[n] by the US and keep a flexible approach so as to calibrate our response accordingly,” Šefčovič said during his remarks.
The reciprocal tariffs are not the only trade actions on the horizon giving the EU pause. Šefčovič also noted that the U.S. has launched a probe into the national security impacts of copper and wood products.
Recent proposals to spur U.S. shipbuilding could also affect U.S.-EU trade, Šefčovič said. As part of those proposals the U.S. is considering requiring a share of U.S. exports to be shipped on U.S.-made vessels as well as introducing a surcharge of $1 million on Chinese-operated vessels docking at U.S. ports or $1.5 million on Chinese-built vessels.
Last week, Trump also threatened 200% duties on European wine and champagne, drawing rebuke from European officials.
“We are following all these developments very closely. We will again need to be ready to act firmly, swiftly, and proportionately if needed,” Šefčovič told the EU Committee on International Trade.
Former EU Trade Commissioner Cecilia Malmström suggested during a webinar on Thursday that the delay to the first wave of duties could signal a gesture of “goodwill” and a willingness to talk.
“The problem is there’s a lot on the agenda. It’s not only tariffs,” Malmström said. White House Press Secretary Karoline Leavitt told reporters on Thursday that the move was a sign that countries are taking Trump’s tariff threats seriously.“They understand that he is going to do what's right for American workers and families,” she said, but added that the president and administration officials “are in constant communication with our EU counterparts, but also our counterparts around the world.”For more news, go to Agri-Pulse.com.
