The European Union has a “strong plan” to retaliate against tariffs imposed, and set to be imposed, by U.S. President Donald Trump, although it would prefer to negotiate a solution, EU executive chief Ursula von der Leyen said on Tuesday.
The Trump administration put in place tariffs on imported steel and aluminium in March and higher duties on cars will take effect on Thursday. Trump will also set out plans for “reciprocal tariffs” on Wednesday.
Von der Leyen said she understood U.S. arguments that others had taken advantage of global trade rules, adding the EU had suffered too. She also said she understood the U.S. wanted to re-industrialise, as does the EU.
However, she said U.S. tariffs were taxes on its consumers that would fuel inflation and make American factories pay more for components, costing jobs.
“Our objective is a negotiated solution. But of course, if need be, we will protect our interests, our people, and our companies,” von der Leyen said in a speech to the European Parliament in Strasbourg.
“We do not necessarily want to retaliate. But if it is necessary, we have a strong plan to retaliate and we will use it.”
Von der Leyen also said the EU should diversify its trade and remove internal barriers to cross-border business in its single market.
She said the International Monetary Fund had estimated that Europe’s internal market barriers were equivalent to a 45% tariff for manufacturing and 110% for services.
She told EU lawmakers that the Commission would come up with proposals next month to remove some barriers and prevent new ones. (Reuters)
