Despite US President Trump’s decision to impose high tariffs on EU imports, the European Union remains committed to negotiating. In Luxembourg, the 27 ministers responsible for foreign trade gathered with the Commission to discuss potential countermeasures.
Their goal is to formulate a response to the US tariffs while leaving room for further dialogue. Luxembourg’s Foreign Minister Xavier Bettel stated that Trump, a businessman, should be directly told that high tariffs on EU goods are not in his best interest. Bettel also suggested that if Trump rejects this pragmatic solution and refuses to negotiate, the EU must consider actions that impact the US. He emphasised the importance of unity among the 27 member states, especially as Luxembourg, despite its smaller trade volume with the US, must show solidarity. Bettel warned that future taxes on services could particularly affect Luxembourg.
Bettel outlined two potential scenarios that should be communicated to Trump: “This is Scenario A: the one where we reach an agreement, which benefits you [Trump]. Now, consider Scenario B, if we can’t come to terms. But take a look at what it will cost you [Trump ] – it could create more pressure than the more agreeable Scenario A.” According to Bettel, if scenario A fails and no common ground is found, at least a backup plan is in place for the EU.
In Scenario B, the EU is already reviewing countermeasures in response to US tariffs on steel and aluminum, a tactic reminiscent of the EU’s actions during Trump’s first term. Several measures, including potential increases in pharmaceutical export prices and taxes on tech products, are under consideration. However, no consensus was reached in Luxembourg. Some countries, like France, are open to taking action against US companies while others, like Ireland, see this as an escalation, and Spain and Italy are hesitant.
Beyond tariffs, the EU is exploring other tools, such as making pharmaceutical exports more expensive or implementing a digital tax targeting major US tech corporations. However, consensus among the 27 member states remains elusive. Bettel cautioned against provoking Trump with premature measures: “The goal is to calm down, not escalate,” he said, while stressing that the EU must remain firm in negotiations.
The EU is set to vote on a list of countermeasures this Wednesday.
