In the face of US tariffs on steel, aluminium, autos and autoparts, the threat of resumption of so-called "reciprocal" tariffs and investigations concerning tariffs on products ranging from pharmaceuticals to wood, the EU Commission announced on 8 May 2025 that it is launching a consultation on a list of products for retaliation. Five key points deserve note:
- Comments are invited by 10 June 2025. The Commission process is governed by the EU's Enforcement Regulation, which contemplates public comments, followed by engagement of EU Member States. The Commission appears to be moving urgently, in order to have potential countermeasures available in the context of ongoing political and technical negotiations.
- The Commission invites comments on lists of products that could be subject to potential countermeasures. The lists include both US products that could be subject to increased tariffs (ranging from agricultural products to aircraft) and EU products that could be subject to export restrictions (including scrap metal and certain chemical products), denying US manufacturers important inputs in much the same way that China has sought to do with its rare earth export restrictions.
- The Commission says it will launch WTO proceedings "soon" on the US "reciprocal" tariffs. It seems likely that the EU will not wait until those tariffs are reimposed. No doubt, the EU will be seeking support from potential co-complainants and third parties. The EU's action, therefore, will be triggering reflections by other WTO Members about the role of WTO dispute action in their own strategies to respond to US tariffs. The EU also has the option of reopening a suspended WTO arbitration concerning steel and aluminum tariffs, although this action was not referenced in the Commission's press release.
- The Commission is proceeding on the basis that US measures (including measures taken under both Section 232 of the Trade Expansion Act and the International Economic Emergency Powers Act) are "safeguard" measures to protect US industry. This is important because the EU's Enforcement Regulation seeks to ensure that the EU acts consistently with its own international obligations. Article 8 of the WTO Safeguards Agreement permits the EU to "suspend" WTO obligations owed to the United States in response to US safeguard actions.
- The Commission also states that it is monitoring "diversion" of trade previously destined for the United States. The EU is concerned about surges of imports, particularly from China, harming EU industries. After the first Trump administration imposed tariffs on steel, the EU responded with its own safeguard measures against imports. By stating that it is monitoring diversion, the Commission is saying to third countries that it could respond to import surges on other products in a similar manner.
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