EU countries are coming together to confront U.S. President Donald Trump's recent tariffs, bracing for a potential escalation of trade tensions. The European Union (EU) is likely to approve a package of targeted countermeasures against US imports valued at up to US$28 billion, covering a wide range of goods from dental floss to diamonds, as they join China and Canada in retaliatory actions.

This initial response reflects a growing concern among economists and policymakers that these tariffs could lead to a global trade war, raising prices for consumers worldwide and potentially edging economies into recession. The EU's responses are particularly critical, especially as they grapple with existing US tariffs of 25 percent on steel and aluminum and reciprocal tariffs of 20 percent on many other goods, set to take effect from April 9.

Trump's tariffs affect approximately 70 percent of EU exports to the United States, which amounted to roughly US$585 billion last year. As a counteraction, the European Commission is expected to propose a targeted list of US products that will face additional duties. Key items likely on the list include US meats, cereals, wine, and clothing, along with everyday goods such as vacuum cleaners and toilet paper.

A contentious item in this list is bourbon, which carries a proposed 50 percent tariff. This specific move has triggered threats from Trump of a retaliatory 200 percent counter-tariff on EU alcoholic beverages. Concerns have been voiced particularly by wine exporters from France and Italy, highlighting the vigilant navigation required not to disrupt economic ties further.

A crucial meeting in Luxembourg will gather trade ministers from the 27 EU member states to strategize their collective response. EU diplomats have indicated that the goal is to present a united front capable of negotiating with Washington while retaining a readiness to impose countermeasures if no resolution is achieved.

Member states demonstrate a range of perspectives on how best to respond. French President Emmanuel Macron has advocated for comprehensive measures, suggesting European firms pause investments in the US until “clarified.” In contrast, Ireland, heavily reliant on US markets, emphasizes a more measured approach. Italy has even questioned whether retaliatory tariffs are necessary.

As the EU prepares to vote on these initial counter-tariffs this Wednesday, they anticipate smooth approval barring an unlikely opposition from 15 member states representing 65 percent of the EU’s population. The sanctions are planned for implementation in two stages, with a fraction taking effect on April 15 and the remainder a month later. Commission President Ursula von der Leyen is also set to engage with leaders from key sectors, aiming to assess the broader implications of these tariffs.

For more information, check reports from SCMP, Reuters, and Channel News Asia.