AsianFin -- American services could be added to the European Union’s retaliatory target list, highlighting European countries are feeling the urge to ramp up preparation in case their trade negotiations with the U.S. fail.
Credit：China Central Television
The European Commission is weighing a new round of retaliatory measures against tariffs imposed by the United States that would restrict the county’s services and procurement, the Politico reported on Thursday. It cited European diplomats that Maros Sefcovic, European Commissioner for Trade and Economc Security, Interinstitutional Relations and Transparency, floated the idea in a meeting on Monday, and the EU’s trade chief said the preparatory work was under way for measures beyond goods.
The report suggested that the European Commission has to consider targeting trade of services because there is little room for EU to lauch new countermeasures on U.S. President Donald Trump’s tariffs. “It’s clear they need to start looking at services as we have more or less exhausted ourselves on goods. And if Trump comes with more bombshells like pharma and semiconductors, we need to have something to hand,” said one of the aforementioned diplomats.
The report indicated that idea about curbs on U.S. services didn’t receive recognition among the EU members yet. A majority of the countries is reportedly concerned about what exactly would be targeted, and if this could draw further reprisals from the Trump administration as Brussel and Washington are negotiating to reach a trade agreement that would allow the EU to spare from upcoming 30% tariffs that Trump threatened days ago.
Trump on Saturday released his letter to Ursula von der Leyen, president of the European Commission, dictating new tariffs on the EU exports starting August 1. Just like letters Trump sent to leaders of more than 20 countries, the president said the new tariffs would separate from sectoral tariffs, warning them not to retaliate, urging them to relocate companies to the United States, and suggesting that the tariff rates could be adjusted if they cooperate.
EU trade minister agreed on Monday that Trump’s new threat of 30% tariffs was “absolutely unacceptable” after a meeting in Brussels. Sefcovic that day said it was “very obvious from the discussions today, the 30% is absolutely unacceptable.” He also said the European Commission was sharing proposals with the 27 member states for the second list of goods accounting of some €72 billion euros ($84 billion) worth of U.S imports.
The EU has finalized a second list of countermeasures to target American goods worth €72 billion, or $84 billion, including Boeing Co. aircraft, automobiles, bourbon, machinery products, chemicals and plastics, medical devices, electrical equipment, wines and other agricultural goods if it decides to retaliate against new U.S. tariffs, Bloomberg later Monday cited a 206-page list prepared by the European Commission.
A growing number of the EU members want the bloc to activate its Anti-Coercion Instrument (ACI) against the U.S. if an acceptable agreement is not struck by August 1 and Trump starts levying 30% tariffs, Bloomberg reported on Wednesday. More than half a dozen European capitals are in favor of the proposal for deployment of the ACI tool, led by French, the report quoted people familiar with the matter. Several member states are more cautious, while others have not expressed their position, per the report.
The ACI is the EU’s most powerful trade tool as it enables the European Commission to adopt a wide range of response measures in retaliation to coercive actions from U.S., such as new taxes on U.S. tech giants, targeted curbs on U.S. investments, limited access to the EU market. It also could give officials the power to hit target services.
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