What products would the EU's counter-tariffs really target?

The European Union is currently discussing possible countermeasures in response to the import duties introduced by Donald Trump. We already described possible reactions and their likelihood in our week in focus last week. With the end of negotiations approaching in early July, pressure is now mounting on the EU to specify potential countermeasures. To this end, the European Commission has published two lists: a finalized list of counter-tariffs in response to the US steel and aluminum tariffs (around 1,700 products, link ) and a list still under discussion of counter-tariffs following the “reciprocal” tariffs (around 5,000 products, link ). The second list may still change slightly. However, only a qualified majority of EU member states can completely stop countermeasures. If no agreement is reached with the US, countermeasures could therefore be introduced quickly.

We also analyzed the trade volume behind the product lists. Overall, the goods on the two lists account for around 40% of the import volume from the US. Since Trump's tariffs cover more than 70% of imports from Europe, the EU has chosen not to retaliate with an equivalent tariff volume. However, a more nuanced picture emerges when analyzing individual sectors: while fossil fuels from the US (such as LNG) are spared from retaliatory tariffs, the electronics and machinery category is particularly hard hit in terms of trade volume. Aircraft and automobiles, as well as chemical and plastic products from the US, will also be targeted by the EU. At 3.4%, the share of goods in the transport sector subject to countervailing duties as compared to total transportation goods imports would be particularly high. This means that the countervailing duties would not only affect consumer products such as food. Rather, the EU would also interfere in supply chains and make it more expensive for European companies to invest.

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