The European Commission is contemplating a fresh set of retaliatory actions in response to President Donald Trump’s extensive tariffs, which would include restrictions on trade in services and procurement.
Trade Commissioner Maroš Šefčovič introduced the idea during a meeting of EU trade ministers, indicating that preliminary work is being undertaken on measures beyond just goods, according to four EU diplomats.
One diplomat noted, “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.”
Despite this viewpoint, the proposal met with a cautious reception from various EU countries that are worried about what specific targets would be selected and the potential for provoking further retaliation from Washington.
This comes at a time when both sides are attempting to negotiate a deal that would prevent Europe from facing a 30 percent import tariff on all its goods.
A prior round of retaliatory tariffs, aimed at €21 billion in U.S. exports, has already been approved but will remain suspended until August 6, allowing time for negotiations.
The Commission is moving forward with a second package that covers €72 billion in various items, including aircraft, autos, machinery, and agricultural produce, which is currently awaiting approval.
America’s significant trade surplus in services, juxtaposed with its ongoing goods deficit, could become a critical focal point if tensions escalate further.
The prospect of targeting services has been a topic of ongoing discussion throughout the bloc, although it had been sidelined as optimism grew around reaching a preliminary agreement.
Many European capitals, however, remain divided on escalating tensions with Washington as President Trump has threatened to triple tariffs on the bloc from the current 10 percent starting August 1.
One national official explained that discussions are aimed at laying the groundwork in the event that no deal is reached by the looming deadline. “Basically, if there’s no deal, don’t wait until you’re up against the wall to ask yourself the question,” they remarked.
Countries like France have been advocating for a tougher stance from Brussels on President Trump. French President Emmanuel Macron has even suggested the invocation of the European Union’s Anti-Coercion Instrument, a robust trade mechanism capable of targeting services.
Implementing this instrument would necessitate support from a majority of EU member states—specifically, 15 out of 27 countries—and would empower Brussels to impose various restrictions, such as limiting American firms’ access to EU public markets or enhancing control over Big Tech operations within the bloc.
Despite such suggestions, diplomats have indicated a general reluctance among EU nations to pursue this avenue for retaliation at this time.
During the ministerial meeting, Šefčovič pointed to the option of using the EU’s Enforcement Regulation instead.
This law, which was bolstered in 2021, allows the EU to exclude companies from public tenders if violations by trade partners harm its economic interests.
“There was the discussion of [how] we have the first list, now we have the second list, and whether we should have a third list of the different measures,” stated Lithuanian Foreign Minister Kęstutis Budrys after the meeting.
The European Commission declined to provide additional comments on the situation.
image source from：politico
