European Union prepares for U.S. reciprocal-tariff policy

Export-oriented companies on both sides of the Atlantic are concerned about a potential tariff conflict.

President Donald Trump’s plan for reciprocal tariffs

U.S. President Trump has announced a “Fair and Reciprocal Plan” to counteract trade agreements that he sees as “unfair”. Trump makes no distinction between “friend and foe” and describes the “injustices” of his trading partners as the cause of the United States’ high trade deficit. The plan directs the U.S. Secretary of Commerce and the U.S. Trade Representative, in consultation with other foreign government officials, to review tariff and non-tariff barriers to trade and make recommendations for remedial measures, including reciprocal tariffs. The investigation will come after the authorities submit their reports on April 1, 2025, as part of the America First Trade Policy Memorandum.

The U.S. President has announced that the reciprocal tariffs will come into effect as of April 2, 2025.

How the EU prepares for potential U.S. reciprocal tariffs

EU Commissioner Maroš Šefčovič met with Secretary of Commerce Howard Lutnick as well as U.S. Trade Representative Jameson Greer and National Economic Council Director Kevin Hasset on February 20, 2025, in Washington D.C.

He underlined the importance of the EU-U.S. economic partnership in goods and services, worth some USD 1.7 trillion. Šefčovič emphasized the EU’s willingness to find mutually beneficial solutions and foster a level playing field for both sides.

EU officials see a variety of potential deals with U.S. President Trump. One idea is to agree on higher imports from the United States. The import of liquid gas, fertilizers or weapons is being discussed; Trump himself has brought oil and natural gas into play. It is also conceivable that the EU offers to reduce tariffs on imports from the United States. Car imports from the U.S. are currently subject to a Most Favored Nation tariff rate of ten percent in the EU, while the United States only applies a tariff rate of 2.5 percent on car imports from Europe (except for pickup trucks with a tariff rate of 25 percent).

On the other hand, the European Union is preparing potential countermeasures which target primarily products from U.S. swing states, such as orange juice, motorcycles, soybeans, and bourbon whiskey.