The European Union is prepared to make a “credible threat” of retaliatory tariffs against the U.S. in order to secure a fair trade deal, said the Financial Times. The approach echoes President Trump’s threat to tariff imported EU goods at 50% if no agreement is reached by July 9.
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“We’re ready to use a variety of options if there is no deal. We can and we will defend our interests,” said German Chancellor Friedrich Merz on Tuesday.
EU Ready to Escalate Tariffs as a Bargaining Chip
Bjoern Seibert, Chief of Staff to the European Commission President, has asked ambassadors of the EU for their support in placing tariffs on €95bn, or approximately $110 billion, of U.S. goods. The EU could also charge additional duties to U.S. technology companies and limit public procurement contracts for American companies.
The EU’s goal is to reduce U.S. tariffs on individual items, like vehicles, steel, and semiconductors. The 27-nation bloc has “privately conceded” that it will not be able to remove the baseline 10% tariff.
The Magnificent 7 stocks have shrugged off the news with a majority of them trading higher on Tuesday.
