EU weighs export restrictions on US if trade negotiations fail

Trump has also imposed a 25 per cent duty on cars as well as some parts, and his administration has moved forward with plans to impose duties on semiconductor and pharmaceutical imports

    • The EU and the US have so far made little progress in talks aimed at defusing the conflict.
    • The EU and the US have so far made little progress in talks aimed at defusing the conflict. PHOTO: BLOOMBERG
    Published Fri, Apr 18, 2025 · 08:14 AM

    [LONDON] The European Union is working on a proposal to introduce restrictions on some exports to the US as a possible retaliatory tactic in the expansive trade war US President Donald Trump initiated last month.

    The restrictions would be used as a deterrent and only if negotiations with the US – which has put new tariffs on around 380 billion euros (S$566 billion) of EU goods – fail to produce a satisfactory outcome, according to sources familiar with the plan.

    Such retaliation by the EU would mark an escalation in an expanding trade dispute as it could invite a forceful response from Washington. Trump threatened to put a 50 per cent tariff on Canadian metals last month after Ontario announced plans to place a surcharge on electricity sent to the US.

    An export restriction is one of several options the EU is considering, said the sources, who spoke on the condition of anonymity. Other possibilities include additional lists of tariffs and limiting public procurement for American companies.

    A spokesperson for the European Commission declined to comment.

    The sources declined to elaborate on the specific restrictions the EU is considering and which sectors and products they would apply to. Such measures can normally be implemented in various ways, ranging from quotas and licenses all the way to outright bans on specific goods.

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    Typically these types of restrictions target goods critical to the country and that would be difficult to replace. China earlier this month added seven rare earths – with applications in smartphones to medicines – to its export control list. The US has almost no processing ability of those metals.

    The EU and the US have so far made little progress in talks aimed at defusing the conflict. Ahead of a meeting with Italian Prime Minister Giorgia Meloni on Thursday (Apr 17), Trump said he was “very confident” of a deal with the EU. European officials are hoping that the Italian premier can convince Trump to empower his trade officials with a clearer negotiating mandate, some of the sources said.

    The EU agreed last week to delay for 90 days the implementation of a set of counter-tariffs against the US over 25 per cent duties Trump imposed on the bloc’s steel and aluminium exports. That move came after the US president lowered his so-called “reciprocal” rate on most EU exports from 20 to 10 per cent for the same amount of time.

    Trump has also imposed a 25 per cent duty on cars as well as some parts, and his administration has moved forward with plans to impose duties on semiconductor and pharmaceutical imports.

    Trump has said that his global tariff strike is a bid to bring manufacturing jobs back to the US and raise revenue to pay for a tax-cut extension.

    The EU’s trade chief, Maros Sefcovic, met with Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer in Washington on Monday. Sefcovic left the meeting with little clarity on the US stance and struggling to determine the American side’s aims, Bloomberg reported earlier.

    The bloc is already working on plans for more counter-measures in the event they fail to reach a deal at the end of the 90 days. European Commission President Ursula von der Leyen has indicated that another option could see the bloc target the digital advertising revenues of US tech companies.

    Any further escalation beyond the existing tariffs may require political decisions from the bloc’s capitals before additional plans are drafted, one of the sources said. BLOOMBERG

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