EU response to US tariff threats: Strong retaliatory measures will be taken if necessary.

The European Union has stated that if U.S. President Donald Trump imposes so-called reciprocal tariffs on the EU this week, the EU will take multiple measures to retaliate against the United States. European Commission President Ursula von der Leyen said on Tuesday, "We may not want to retaliate. If necessary, we have a strong retaliation plan and we will use it." The U.S. plans to impose comprehensive tariffs on global partners as early as Wednesday. Trump has stated that these measures will correct tariffs as well as what he deems unfair non-tariff barriers, such as domestic regulations and tax practices in various countries, including the EU's value-added tax. The EU has stated that its value-added tax is a fair and non-discriminatory tax that applies equally to domestic and imported goods. France and other countries are urging trade officials to consider deploying the EU's anti-coercive tools. Media reports have suggested that this could lead to restrictions on trade and services, as well as certain intellectual property rights, foreign direct investments, and public procurement channels. Von der Leyen stated that once new tariffs are announced, the goal is to "resolve issues through negotiation." The EU is preparing to retaliate against up to 26 billion worth of American goods in response to the U.S. metal tariffs. Von der Leyen mentioned that Europe's strengths not only lie in trade but also in technology, which impacts the operations of major U.S. tech companies in Europe. The EU may include these companies as part of retaliatory measures. The European Commission can use various legal means to limit these companies' opportunities to obtain government contracts or to sell digital advertising in a market worth around 100 billion ($108 billion). Von der Leyen said, "Europe has many cards to play. From trade to technology, to the size of our market. But this strength is also based on our readiness to take resolute countermeasures at any time. All options are on the negotiating table." It was previously reported that the European Commission was drafting a "list of terms" to reach an agreement with the U.S. after the new tariffs take effect. This list would outline areas for negotiation with the U.S. on tariffs, mutual investments, and easing certain regulations and standards. However, sources indicated that it will take time for the EU's 27 countries to reach a consensus. EU trade ministers will meet in Luxembourg on April 7th to start discussions on how to address Trump's tariff plans and prepare for tough negotiations. In addition to imposing tariffs on automobiles and certain components, Trump has also announced tariffs on other industry products such as lumber, pharmaceuticals, and semiconductors. It is not yet clear when these additional tariffs will be implemented. In recent weeks, Trump administration officials in Washington highlighted EU regulations perceived as barriers to U.S. exporters, such as digital taxes, environmental requirements, or value-added taxes. The EU had proposed an agreement to the U.S. government to lower industrial tariffs, including those on automobiles, and possibly increase imports of American products like soybeans and liquefied natural gas. However, EU Trade Commissioner Maros efovi, who visited Washington last week, has so far failed to persuade the U.S. to start negotiations before announcing reciprocal tariffs on Wednesday. Trump has stated that his tariff barriers will encourage foreign manufacturers - or U.S. companies operating overseas - to build factories in the U.S. and hire American workers, thereby reversing the hollowing out of the American middle class. Additionally, the tariff war aims to create revenue to offset the costs of tax cuts. But EU officials and businesses are concerned that this trade impact will affect the relationship between the two long-standing allies. Von der Leyen said on Tuesday, "This is the largest and most prosperous trade relationship in the world. If we can find constructive solutions, we will all be better off." As part of its response to the U.S. trade offensive, the EU also hopes to make progress in diversifying its trade relationships. In addition to agreements with 76 countries, the EU recently concluded negotiations with the Mercosur, Mexico, and Switzerland, and plans to reach an agreement with India by the end of this year. Von der Leyen said, "Our message is clear: Europe is reliable, predictable, and open to fair business."