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The EU has said it offered the US a “zero-for-zero” tariff deal on cars and industrial goods weeks before Donald Trump launched his trade war, but that it would not wait to defend itself.
Maros Šefčovič, the EU commissioner for trade, said he had proposed zero tariffs on cars and a range of industrial goods, such as pharmaceutical products, rubber and machinery, during his first meeting with the US commerce secretary, Howard Lutnick, on 19 February.
He said the EU remained open for talks, while suggesting nothing would be concluded soon: “Right now we are in the early stages of discussions, because the US view tariffs not as a tactical step, but as a corrective measure.”
The European Commission president, Ursula von der Leyen, said the EU had offered “zero-for-zero tariffs for industrial goods” and that offer remained on the table.
Trump has repeatedly railed against the US trade deficit in goods with the EU, focusing on cars. “They don’t take our cars, they don’t take our food products, they don’t take anything,” he said again over the weekend.
But Šefčovič rejected suggestions EU countries would abandon VAT, one of Trump’s grievances with the EU. He said the EU had spent “some time and energy” to explain to US counterparts how the sales tax works, citing its use in more than 161 countries. “We are ready to discuss, to look at things, but it has to be a mutually advantageous solution.”
The EU trade commissioner was speaking after it emerged that the union is likely to exempt US bourbon whiskey from its retaliation against Donald Trump’s tariffs, in a sign of tensions over how to handle the expanding trade war.
EU member states are will take a vote on Wednesday over a first round of possible retaliation, in response to Trump’s tariffs on steel and aluminium announced last month. The bloc vowed to target up to €26bn (£22.3bn) of emblematic US goods, such as Harley-Davidson motorbikes, orange juice and jeans, with tariffs due to come in to force from 15 April. Some countries, notably France and Ireland, have been lobbying for bourbon to be dropped from the list, after Trump threatened 200% tariffs on French wine and champagne.
On Monday, a European Commission vice-president, Stéphane Séjourné, told French Inter Radio he had “a hope” that bourbon would be removed from the list in the coming hours, saying “the message has been taken that the economic impact could be major”.
But Germany’s economy minister, Robert Habeck, warned that handing out exemptions would undermine the EU’s retaliation. “The stock markets are already collapsing and the damage could become even greater. It is therefore important … to act clearly and decisively and prudently, which means realising that we are in a strong position. America is in a position of weakness,” Habeck told reporters. “If every country is counted individually, and we have a problem here with red wine and there with whisky and pistachios, then it will all come to nothing,” he said.
Italy’s deputy prime minister, Antonio Tajani, suggested the EU could postpone enforcing counter-tariffs against the US until 30 April in order to create more time for dialogue, while stressing that Italy had no intention of putting the bloc “in difficulty”.
The Italian prime minister, Giorgia Meloni, arranged to hold a meeting to discuss the tariffs and their impact on Italy with senior ministers later on Monday. According to reports in the Italian press, she is planning to go to Washington, possibly on 16 April, and intends to encourage Trump to halve the 20% tariff imposed on the EU.
Meloni said last week that “alarmism” over the tariffs may be worse than the actual tariffs, and on Sunday added that while her government didn’t agree with the measures: “we are ready to deploy all tools” in order to shield Italian businesses.
Šefčovič said there could be no delay to the 15 April start date, citing EU procedures, but said the measures would fall short of the €26bn originally outlined. “We are not in the business of tit for tat, or penny for penny. We will do this because we are forced to and we still hope we will come to the fruitful mutual advantageous trading relationship.”
At a meeting of EU ministers in Luxembourg on Monday, differences also emerged over how to treat US tech companies, as the EU runs into limits on US goods it can target.
In the planned counter-tariffs, the bloc aims to target US products that can be easily replaced, such as soya beans and consumer goods, rather than, for example, liquified natural gas, imported energy that is helping the EU replace Russian gas.
France, which has called for a suspension of investment into the US, has said nothing should be off the table when it comes to retaliation. The French delegate for trade, Laurent Saint-Martin, said on Monday that no option on goods or services could be excluded and that the EU could be “extremely, extremely aggressive also in return”, referring to the bloc’s anti-coercion instrument.
He said: “Our end goal remains the same, to negotiate this escalation and negotiate back to where things were, and if it’s not possible, of course, [the] European Union must react, must react firmly and must react proportionately.”
But Ireland’s foreign minister, Simon Harris, rejected calls to target US tech companies, describing such a measure as “an extraordinary escalation at a time when we must be working for a de-escalation”.
The EU’s never-used anti-coercion law would allow the bloc to take wide-ranging measures against a country deemed to be using trade as a weapon, such as suspending intellectual property rights, revoking licences to do business in the EU and banning companies from bidding for public contracts.
Šefčovič, who was briefing ministers on his recent calls with senior US officials, said “a paradigm shift” in global trade was under way.
EU trade and economy ministers began meeting in Luxembourg as Trump’s tariffs continued to roil global stock markets, deepening last week’s two-day sell-off that analysts called one of the worst since the second world war. Trump’s tariffs are affecting €382bn of EU exports to the US.
Habeck, the outgoing German economy minister, also gave a blunt verdict on Trump tariffs, saying the US president’s widely derided models were “ridiculous” and describing recent comments by Elon Musk as “a sign of weakness”.
The billionaire adviser to the US president and owner of Tesla said over the weekend that he hoped to see complete freedom of trade between the US and Europe. Habeck said these comments were “a sign of weakness” and showed Musk was afraid for his own companies: “If [Musk] has something to say he should go to his president and say before we are talking about zero tariffs, let’s stop the nonsense, the mess you have just made in the last week.”
Trumps’s 20% tariff on all EU goods has been difficult to handle for his closest allies in Europe, such as Meloni, but also Hungary’s Viktor Orbán. Hungary’s foreign minister, Péter Szijjártó, said he expected the European Commission to negotiate with the US and China and “to put solid suggestions on the table and succeed”.
The former Italian prime minister Matteo Renzi said on Monday that Meloni, who was the only European prime minister to attend Trump’s inauguration in January, should “distance herself” from Trump. “This doesn’t mean declaring war against America, this means defending our businesses,” he said.
