What are the EU's options in response to Trump tariffs?

Former President Donald Trump has announced plans to impose tariffs on steel and aluminum imports, aiming to align U.S. trade rates with those of other countries.

The move risks escalating tensions with the European Union, which has vowed to "respond firmly" if it faces unfair targeting.

EU threatens countermeasures

The United States and the European Union maintain the world’s largest commercial relationship, with trade totaling $1.55 trillion in 2023.

European Commission President Ursula von der Leyen has signaled that Brussels will not hesitate to retaliate if Trump’s tariffs are deemed punitive.

The EU took similar action in 2018 when Trump first imposed tariffs on $6.8 billion worth of European steel and aluminum.

In response, the EU hit back with duties on $3 billion in American goods, including Kentucky bourbon whiskey, Wisconsin Harley-Davidson motorcycles, and Florida orange juice—all key products from states that supported Trump.

This time, the EU could adopt a "rebalancing" strategy, mirroring Washington’s measures with tariffs on select U.S. goods. In 2023, the U.S. exported $538 billion worth of goods and services to the EU, meaning Brussels has ample room to target American products.

New legal tools

The EU may also invoke its Anti-Coercion Instrument (ACI), a law enacted in late 2023 that allows the bloc to retaliate against economic pressure from third countries. The ACI gives Brussels a broad range of options, including:

• Tariffs on U.S. imports
• Restrictions on public procurement for American companies
• Limitations on digital services and intellectual property rights

The U.S. has a trade deficit in goods with the EU but a services trade surplus, particularly in digital services from Amazon, Microsoft, Netflix, and Uber. Analysts say the EU could target tech firms if the trade dispute escalates.

Big tech in the crosshairs

Beyond traditional tariffs, the EU could tighten regulatory pressure on major U.S. tech firms under the Digital Markets Act (DMA) and Digital Services Act (DSA).

Brussels already has ongoing investigations against Apple, Google, Meta, and X (formerly Twitter), and may soon add Amazon to the list.

The DMA allows for fines of up to 20% of a company's global turnover for repeated violations, while the DSA sets the maximum fine at 6% of revenue.

Tech CEOs, including Mark Zuckerberg and Elon Musk, have clashed with EU regulators. Zuckerberg reportedly sought Trump’s intervention to halt European fines on U.S. tech giants.

The risk of a renewed trade war

Trump’s first term saw repeated clashes with Europe over digital taxes, prompting retaliatory tariffs that were later suspended by President Joe Biden.

If the EU revives plans to tax digital services, Trump could respond with further duties, reigniting a transatlantic trade war.

For now, EU officials say they will monitor Trump’s next move before launching countermeasures. With the U.S. election approaching, trade tensions between Washington and Brussels could shape global economic policy for years to come.