Summary
The European Union (EU) is preparing to announce a new package of countermeasures in response to tariffs imposed by the United States on European steel, aluminium, and other goods. These forthcoming actions come amid an ongoing trade dispute that began in 2018, when the US introduced tariffs of 25% on steel and aluminium imports citing national security concerns under Section 232 of the US Trade Expansion Act. The EU’s countermeasures aim to rebalance the economic impact of these tariffs, targeting up to €26 billion worth of US exports through the suspension of tariff concessions and the imposition of additional customs duties, consistent with World Trade Organization (WTO) safeguard provisions and EU legal frameworks.
This trade conflict has escalated following the US’s expansion of tariffs in March 2025, prompting the European Commission to prepare a broader and more comprehensive response. The EU’s actions are grounded primarily in Regulation (EU) No 654/2014, which authorizes the suspension or withdrawal of trade concessions when trading partners implement safeguard measures adversely affecting the EU’s interests. In addition, the EU may consider deploying the recently adopted Anti-Coercion Instrument (ACI), a tool designed to counteract coercive economic measures beyond traditional trade disputes, although its use involves a more complex and lengthier procedure.
The EU’s approach seeks to balance firm defense of its economic interests with ongoing diplomatic efforts aimed at negotiation and de-escalation. While the Commission has postponed the imposition of some countermeasures to allow dialogue with US authorities, unresolved issues persist, particularly regarding tariffs on automobiles and related parts. The dispute highlights broader geopolitical and economic tensions, including concerns over supply chain security, protection of domestic industries, and the future of the multilateral trading system.
Reactions from EU policymakers, businesses, and trade experts underscore the challenges and risks associated with escalating tariffs. The European Parliament has emphasized the necessity of retaliatory measures to protect European jobs and industries, while companies face mounting uncertainty requiring strategic adaptation to new trade rules and tariff regimes. The upcoming EU announcement is thus a significant development in transatlantic trade relations, reflecting the complex interplay of legal, political, and economic factors shaping this protracted dispute.
Background
The ongoing trade tensions between the European Union (EU) and the United States (US) have escalated over a series of tariff impositions and retaliatory measures since 2018. Initially, the US imposed tariffs of 25% on steel and aluminium imports, affecting several trading partners including the EU. In response, the EU introduced countermeasures on approximately €2.8 billion worth of US exports, structured into multiple sets targeting different product categories. These countermeasures were aimed at safeguarding European businesses and workers from the impact of what the EU considered unjustified trade restrictions.
The situation intensified in March 2025 when the US reinstated and broadened tariffs on steel, aluminium, and certain related products from the EU, imposing duties of up to 25%. This led the European Commission to announce a two-step approach: allowing the suspension of existing countermeasures from 2018 and 2020 to lapse and preparing additional countermeasures targeting roughly €18 billion worth of US goods, thereby matching the increased value of trade affected by the new US tariffs. The EU’s legal basis for these countermeasures is Regulation (EU) No 654/2014, which provides the framework for suspending or withdrawing concessions under international trade agreements when trade partners enact safeguard measures.
Throughout this period, the EU sought to balance firm responses with negotiations. For instance, it temporarily suspended some countermeasures until July 2025 to provide space for dialogue with US authorities aimed at finding longer-term solutions, such as tariff-based quota systems for EU exporters. Despite ongoing discussions, tariffs on automobiles and automobile parts remain subject to adjustment following legislative proposals by the EU, with the US committing to cap tariffs on certain originating goods at 15% or the Most Favoured Nation (MFN) tariff rate, effective September 1, 2025.
The backdrop to these developments includes the broader political and economic climate, where trade measures have been a tool for addressing concerns over unfair trade practices and protecting domestic industries. The EU has consistently emphasized its commitment to open, rules-based international trade but has also made clear its readiness to implement proportionate countermeasures in defense of its interests. The upcoming EU announcements on further tariff countermeasures reflect this ongoing dynamic and the complex nature of EU-US trade relations.
Legal and Regulatory Framework
The European Union’s countermeasures in response to United States tariffs are principally grounded in Regulation (EU) No 654/2014, commonly referred to as the Enforcement Regulation. This Regulation provides the legal basis for the EU to suspend or withdraw concessions or other obligations under international trade agreements, with the specific intention of rebalancing concessions affected by safeguard measures imposed by third countries, such as the US. The Enforcement Regulation is applied when the EU considers that trade actions taken by a third country qualify as safeguard measures pursuant to Article 8 of the WTO Agreement on Safeguards or comparable provisions in other international trade agreements.
Under this framework, the European Commission finalizes an implementing draft detailing the contemplated countermeasures and their scope, subsequently consulting EU Member States through the comitology procedure. This process involves endorsement by Member States before the measures are adopted and enter into force, typically aiming for a timely response; for instance, a recent package was targeted for adoption by mid-April. The countermeasures envisaged include suspension of tariff concessions and the imposition of increased customs duties on certain US products, designed to correspond to the economic impact of the US tariffs on EU exports—estimated in the billions of euros.
Beyond the Enforcement Regulation, the EU has developed broader instruments such as the Anti-Coercion Instrument (ACI), which extends the Union’s ability to respond to a wider range of coercive economic measures by third countries, including those that interfere with the sovereign decision-making of the EU or its Member States. The ACI allows the EU to impose countermeasures even in the absence of a formal trade dispute and can target specific entities linked to foreign governments or apply more generally across sectors or regions. However, the implementation of countermeasures under the ACI can be a lengthier process, potentially taking up to a year, unless emergency conditions warrant expedited action.
All EU countermeasures must be carefully designed to comply with WTO rules, ensuring that safeguards remain temporary, non-discriminatory (applying erga omnes), and do not inadvertently harm EU businesses reliant on imports of the impacted goods. The Enforcement Regulation thus serves as a key tool for the EU in legally responding to perceived breaches of international trade rules, aiming to restore a balanced trade relationship and safeguard the interests of European exporters and producers affected by foreign safeguard measures.
Development and Decision-Making Process
The European Commission’s preparation for countermeasures against US tariffs follows a structured and consultative development and decision-making process grounded in the Enforcement Regulation (Regulation (EU) No 654/2014). This legal framework allows the EU to suspend concessions or impose additional trade restrictions in response to adverse trade measures by third countries that negatively affect the EU’s interests. The Commission’s approach is designed to be proportionate, effective, and aimed at minimizing disruption to EU businesses and consumers while defending European economic interests.
The process begins with the Commission finalizing a draft implementing act detailing the proposed countermeasures. This draft undergoes a two-week consultation period with EU stakeholders, including affected businesses, to ensure that the right products are targeted and that the response remains proportionate. The Commission actively encourages stakeholders to submit their views during this phase to fine-tune the selection of products and the scale of measures imposed.
Following stakeholder consultation, the draft implementing act is submitted to the Member States for endorsement through the comitology procedure. This step involves formal examination and approval by representatives of EU Member States, which ensures democratic oversight and legitimacy of the proposed measures. Concurrently, the Council of the European Union and the European Parliament examine the final deal and decide whether to approve the countermeasures, providing an additional layer of institutional control.
Throughout the process, the Commission remains open to negotiations with the United States to avoid escalation and to seek a mutually beneficial resolution. However, delays and extensions have occurred, reflecting ongoing dialogue and attempts to resolve the dispute without triggering the full implementation of countermeasures. For instance, the expected imposition of the first countermeasures was postponed from mid-April to early August and later to mid-July 2025 to allow further negotiations and consultations.
The types of countermeasures under consideration include suspension of tariff concessions under WTO safeguard rules and the imposition of increased customs duties on selected US products. These measures aim to offset the economic harm caused by US tariffs affecting significant volumes of EU exports, notably in steel and aluminium sectors. The Commission must justify the adoption of any measures by demonstrating their necessity and proportionality, as well as the inadequacy of alternative options such as direct negotiations or third-party mediation.
The EU’s internal decision-making process in trade policy, especially regarding contentious measures like countermeasures, reflects a balance of competences between the European Commission and Member States, with the Commission playing a leading role in shaping the EU’s negotiating position. This collaborative approach seeks to ensure transparency, accountability, and efficiency, learning from previous experiences within international trade fora such as the WTO.
Details of Proposed Countermeasures
The European Commission is preparing to unveil a range of retaliatory countermeasures in response to the United States’ tariffs on EU steel, aluminium, and other goods. These measures are currently under investigation, and their exact type and scope have not yet been officially announced. However, the Commission is considering several commercial policy actions as outlined in Article 5 of the Enforcement Regulation, including the suspension of tariff concessions under Article 8 of the WTO Agreement on Safeguards and the imposition of increased customs duties on certain US products.
The targeted countermeasures are expected to affect US goods exports valued at up to €26 billion, aiming to match the economic impact of the US tariffs on European exports. This follows the US imposition of tariffs in June 2018 on approximately €6.4 billion (€8 billion based on updated 2024 values) of European steel and aluminium. The countermeasures will cover a broad and varied list of products, extending beyond steel and aluminium to other categories such as boats, bourbon, motorbikes, and various agri-food and industrial goods. The EU’s earlier rebalancing measures were split into two annexes, with Annex I targeting €2.8 billion and Annex II targeting €3.6 billion worth of US goods, and the new measures are expected to be implemented fully for the first time.
In January 2020, the EU had introduced additional tariffs affecting around €40 million of EU exports of certain derivative steel and aluminium products, to which it responded with targeted rebalancing measures. The upcoming countermeasures seek to ensure that the total value of EU responses corresponds proportionately to the value of US tariffs, thereby maintaining an effective economic balance. To achieve this, the Commission initiated a consultation process with EU stakeholders to identify the most appropriate products for inclusion in the new measures, minimizing disruption to EU businesses and consumers.
The implementation timeline for some of these countermeasures has experienced adjustments. Initially scheduled for April and May 2025, the imposition of additional tariffs has been postponed to 15 July 2025, which also marks the end of the suspension period for certain earlier countermeasures involving products like lighters, furniture fittings, and playing cards. Meanwhile, preparations for further countermeasures continue, emphasizing the importance for businesses to monitor developments closely and to strategically manage their supply chains and tariff classifications in response to the evolving trade environment.
The design of these countermeasures must comply with WTO rules, requiring that any safeguard measures be temporary and applied without discrimination to all WTO members (erga omnes). The EU has previously justified its rebalancing measures under Regulation (EU) No 654/2014, considering US Section 232 tariffs as safeguard measures warranting this response. Companies impacted by these measures should also be mindful of the legal precedents, such as the Harley Davidson judgment, which highlights the need for economic justification in production relocations to avoid countermeasure implications.
Political and Economic Context
The ongoing trade tensions between the European Union (EU) and the United States (US) have unfolded against a backdrop of complex political and economic dynamics marked by reciprocal tariff measures and disputes spanning multiple sectors. The imposition of US tariffs on EU products, including steel, aluminum, textiles, home appliances, and agricultural goods, has exacerbated already strained transatlantic relations, with the EU preparing countermeasures as a response to safeguard its economic interests. These tariffs are partly justified by the US under national security grounds, notably through Section 232 and Section 301 trade actions, targeting issues such as technology transfer and intellectual property practices.
From a political perspective, the EU’s decision-making process on trade policy involves a balance of competence between national governments and supranational institutions, such as the European Commission, which controls the EU’s position in international trade negotiations. The EU’s enforcement mechanisms rely on a legal framework established by regulations like the Enforcement Regulation (Regulation (EU) No 654/2014), which governs the adoption of countermeasures following a comitology procedure requiring qualified majority voting among Member States. This system reflects the EU’s efforts to reconcile technocratic efficiency with democratic accountability in its trade policy.
Economically, the US tariffs impose increased costs on EU exporters, leading to reduced competitiveness in the US market and fueling inflationary pressures domestically within the US. The EU’s proposed countermeasures aim to rebalance concessions under the World Trade Organization (WTO) framework by suspending tariff concessions or imposing increased customs duties on certain US products, consistent with Article 8 of the WTO Agreement on Safeguards. Companies on both sides face heightened uncertainty, needing to navigate stricter rules of origin and the implications of rulings such as the Harley-Davidson judgment, which emphasizes economic justification for production relocations to avoid tariffs.
The broader economic context also highlights concerns over supply chain vulnerabilities and economic security, particularly for the US, which seeks to maintain a strong domestic manufacturing base to reduce reliance on foreign producers amid geopolitical risks. These trade conflicts reflect deeper challenges within the global trading system, where divergent tariff policies and non-tariff barriers complicate cooperation. Some experts argue that these tensions, while disruptive, might catalyze needed reforms within the WTO to establish a fairer balance in global trade relations.
Implementation Timeline and Procedures
The implementation of the European Union’s countermeasures in response to the new U.S. tariffs follows a structured timeline and procedural framework grounded in Regulation (EU) No 654/2014, commonly referred to as the Enforcement Regulation. This legal basis allows the EU to suspend or withdraw concessions or other obligations under international trade agreements as a means to address safeguard measures imposed by third countries, in this case, the United States.
The process begins with the European Commission finalizing a draft implementing act that sets out the proposed countermeasures and specifies the scope of products subject to these measures. This draft is then submitted for consultation with EU Member States through the comitology procedure, whereby the Member States are invited to endorse the proposed actions before formal adoption. Concurrently, a two-week consultation with EU stakeholders is launched to ensure that the products selected for countermeasures are appropriate, effective, and proportionate, minimizing disruption to EU businesses and consumers.
Following these consultations and endorsements, the adoption process culminates around mid-April, at which point the implementing act enters into force. The new countermeasures are calibrated to correspond in total value to the trade impact of the U.S. tariffs, thus aiming to rebalance concessions and obligations as permitted under the Enforcement Regulation and relevant WTO safeguard provisions.
Notably, in light of the broader scope and increased value of the U.S. tariffs effective from 12 March 2025, the EU had previously suspended its existing countermeasures until 31 March 2025 to allow space for negotiation, pursuant to Commission
Reactions and Analysis
The European Union’s preparations to unveil countermeasures against U.S. tariffs have prompted a range of reactions and strategic analyses from policymakers, businesses, and trade experts. The potential retaliatory actions, which are currently under investigation and may include suspension of tariff concessions and increased customs duties on select U.S. products, reflect the EU’s response to economic harm estimated at €8 billion caused by U.S. steel and aluminium tariffs, as well as additional measures targeting over €18 billion of EU exports.
EU institutions and member states are seriously considering deploying the newly established Anti-Coercion Instrument (ACI), sometimes referred to as the “Trade Bazooka,” to counteract perceived economic coercion by the U.S. The ACI allows for a broader range of countermeasures than traditional trade tools and is designed to address third-country measures that interfere with the Union’s sovereign choices. However, the instrument’s practical implementation may take up to a year, though emergency provisions could expedite its use. This reflects a growing recognition within the EU that escalating trade tensions require flexible and effective policy responses.
European Parliament members have voiced concerns about the inflationary effects of U.S. tariffs on their own citizens and businesses. Bernd Lange, chair of the Parliament’s international trade committee, underscored the inevitability of retaliatory measures, emphasizing the principle that every action in trade policy prompts a reaction. Similarly, Sophie Wilmès, vice-chair of the Parliament’s delegation for relations with the U.S., highlighted dissuasion as the EU’s initial defensive strategy against tariff impositions.
From a strategic business perspective, companies operating across the Atlantic are urged to take a proactive and comprehensive approach to these developments. This involves reassessing global supply chains, tariff classifications, customs valuations, and origin rules to mitigate risks associated with tariff escalations. Enhanced scrutiny of trade flows and contractual arrangements is necessary to adapt to evolving regulations and possible new trade barriers. Moreover, stricter rules of origin and alternative trade instruments could further affect market access, underscoring the importance of vigilant monitoring and strategic planning.
Trade experts also note the broader geopolitical and economic context of these tensions. The U.S.’s increased reliance on foreign producers has exposed vulnerabilities in supply chains, raising concerns about economic security and resilience to geopolitical shocks. Additionally, the challenge for multilateral institutions like the WTO remains significant, as the current economic environment diverges from the assumptions underpinning earlier trade liberalization frameworks, complicating efforts to resolve disputes and reduce tariffs globally.
Finally, political leaders emphasize the importance of reaching a negotiated settlement to avoid a prolonged trade war. While the EU holds less leverage in terms of import volume of U.S. goods compared to the reverse, officials including Italian Prime Minister Giorgia Meloni have stated the EU’s preference for a deal but have not ruled out an “adequate” response if negotiations fail. The issue remains a key topic for upcoming EU trade minister meetings, reflecting the high stakes involved in transatlantic trade relations.
Future Prospects
The future prospects of EU actions on U.S. tariff countermeasures are shaped by a combination of ongoing negotiations, legal frameworks, and strategic policy considerations. The European Union is expected to maintain a proactive and flexible approach in responding to U.S. tariffs, balancing the need for assertive countermeasures with the preference for negotiations aimed at establishing a “balanced and mutually beneficial” trade agreement.
The EU’s potential counteractions may include the suspension of tariff concessions and the imposition of increased customs duties on certain U.S. products, as envisaged under Article 5 of the Enforcement Regulation and Article 8 of the WTO Agreement on Safeguards. These measures are designed as rebalancing concessions in response to U.S. safeguard actions, and their specific scope is still under investigation. Companies affected by these evolving trade policies are advised to closely monitor product-specific impacts and ensure compliance with rules of origin and economic justification requirements, as highlighted by recent WTO judgments.
Strategically, the EU is expected to leverage both domestic policy instruments and international trade mechanisms to mitigate risks associated with reduced market access and shifting tariffs. Stricter rules of origin and alternative trade instruments may be deployed to safeguard EU interests while minimizing disruption to transatlantic trade flows. At the same time, there is recognition within EU institutions and member states that a tariff war would be detrimental to all parties involved, fostering a continued emphasis on diplomatic engagement and WTO reform efforts to establish a fairer global trade system.
The evolving landscape also requires companies to navigate complex political and strategic considerations, particularly in light of the EU’s Anti-Coercion Regulation and its interaction with international trade rules. Expertise in this area is becoming increasingly critical as firms adapt to the regulatory environment and prepare for possible new trade measures that may arise from ongoing EU-U.S. tensions. Overall, the outlook points toward a dynamic interplay between legal recourse, policy innovation, and negotiation as the EU prepares to reveal its upcoming actions in response to U.S. tariff policies.
The content is provided by Sierra Knightley, Front Signals
