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SUNDAY, MAY 11, 2025
EU to target US cars, planes, bourbon if Trump won’t do a deal

World+Biz

Bloomberg
08 May, 2025, 06:15 pm
Last modified: 08 May, 2025, 06:28 pm

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EU to target US cars, planes, bourbon if Trump won’t do a deal

Talks between both sides have made scant progress so far and the expectation is that the bulk of the US levies will remain in place

Bloomberg
08 May, 2025, 06:15 pm
Last modified: 08 May, 2025, 06:28 pm
Boeing fuselages at the company’s manufacturing facility in Renton, Washington, US. Photographer: David Ryder/Bloomberg
Boeing fuselages at the company’s manufacturing facility in Renton, Washington, US. Photographer: David Ryder/Bloomberg

The European Union is planning to hit €95 billion ($108 billion) of US exports with additional tariffs if ongoing trade talks with President Donald Trump's team fail to yield a satisfactory result.

The proposed retaliatory measures would especially target industrial goods including Boeing Co. aircraft, US-made cars and bourbon, which was initially removed from a previous list. The new proposal will be the subject of consultations with member states and other stakeholders through June 10 and could change before it's finalized.

The European Commission, the bloc's executive arm that handles trade matters, is kick-starting negotiations with the US administration this week and is still aiming to find an amicable solution to Trump's tariff push. Commission officials are expected to present Washington with a menu of options, including ideas to lower trade and non-tariff barriers and boosting investments in American, that could be turned into formal proposals.

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Talks between both sides have made scant progress so far and the expectation is that the bulk of the US levies will remain in place. The EU said this week that Trump's ongoing trade investigations would boost the amount of the bloc's goods facing fresh duties to €549 billion.
Still, European Commission President Ursula von der Leyen said the EU "remains fully committed to finding negotiated outcomes with the US."

"We believe there are good deals to be made for the benefit of consumers and businesses on both sides of the Atlantic," she said in a statement. "At the same time, we continue preparing for all possibilities, and the consultation launched today will help guide us in this necessary work."

The EU list of products didn't specify what tariff levels might be imposed. Any decision on rates and numbers would only come after the four-week consultation and depend on the outcome of the negotiations, according to a senior EU official.
In addition to the proposed tariffs, the commission will also consult stakeholders on possible restrictions of EU exports of steel scrap and chemical products to the US worth €4.4 billion, confirming a Bloomberg report from last month. Such measures can normally be implemented in various ways, ranging from quotas and licenses all the way to outright bans on specific goods.

It will also launch a case before the World Trade Organisation against Washington's so-called "reciprocal" tariffs, temporarily set at 10%, and the 25% additional levy on car and car parts, as the EU believes these measures "blatantly violate fundamental WTO rules," the commission said in a statement.

Trump is seeking to rewire the global trading system, saying the US's imbalances with the rest of the world are evidence of his country been treated unfairly. While that policy has primarily featured on-again, off-again tariff moves, the US administration is also negotiating deals, and Trump announced a pact with the UK on Thursday.

His disruption of commerce around the world means that the flow of products has also faced turmoil. The EU said Thursday that it will monitor for for any diversion of goods into the bloc, especially from China, which could result from Trump's tariffs, and will continue to work to conclude trade agreements with multiple countries.

Tariff Barrage

The new EU counter-measure list will come on top of the €21 billion of US goods already targeted by EU levies in response to Trump's 25% duty on steel and aluminum exports. The EU agreed last month to delay for 90 days the implementation of those measures after the US lowered its so-called reciprocal rate on most EU exports to 10% from 20% while the negotiations are taking place.

The proposals announced on Thursday are designed to address those reciprocal levies and the tariffs on cars and car parts.

The bloc could propose further measures should Trump move forward with duties on other sectors: the US president has initiated investigations that could result in duties on the imports of lumber, pharmaceuticals, semiconductors, critical minerals and trucks.

The commission has said all options are on the table in response to such moves and future measures could target US services operating in Europe and restrict the export of certain goods, Bloomberg previously reported.

EU-US Trade

In 2024, the EU exported €531.6 billion in goods to the US and imported €333.4 billion, resulting in a €198.2 billion trade surplus, according to Eurostat. If services are added the picture however is more balanced as the US registers a surplus in this segment. The difference between EU exports to the US and US exports to the EU stood at €48 billion in 2023; the equivalent of just 3% of the total trade between the EU and the US.

Boeing Fallout

The commission's targeting of aircraft is a blow to Boeing. Customers' reluctance to accept planes with added fees presents an emerging problem for the US company. About 58 of its outstanding aircraft deliveries for the remainder of 2025 are headed to EU member states, according to TD Cowen analyst Gautam Khanna.

Another 50 or so jets are earmarked for customers in China, Cowen estimates, where airlines are already refusing new planes as part of a tariff standoff with the US. Boeing Chief Executive Officer Kelly Ortberg has said the US planemaker will look for alternative takers for these aircraft if necessary.

"The EU tariff dynamic may add to this total, depending on the severity of the EU tariffs should they occur," Khanna said.

Top News

European Union (EU) / Donald Trump / Trump Tariffs

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