EU offers zero for zero tariffs with the US

Ursula von der Leyen, President of the European Commission, has said that the EU has offered the US a “zero-for-zero” tax plan in order to avoid a trade war. This was decided in preparation for its first set of targeted countermeasures.

Ursula von der Leyen said, “We have offered zero-for-zero tariffs for industrial goods as we have successfully done with many other trading partners. Because Europe is always ready for a good deal. So we keep it on the table.”

The US imposed tariffs on steel, aluminum, and cars on the 27-nation group and will be subject to 25% tariffs on imports. Also, starting Wednesday, almost all other goods will be subject to 20% reciprocal tariffs. In total, over 380 billion euros in EU-made products will be affected.

BREAKING: European Commission president Ursula von der Leyen says the EU stands ready to negotiate a zero for zero tariff deal with the United States. pic.twitter.com/q1haL7VVWB

— Charlie Kirk (@charliekirk11) April 7, 2025

Today, ministers in charge of trade gathered in Luxembourg to discuss the EU’s answer and its relationship with China. Most European Union ministers said the most important thing was to start talking and avoid a full-on trade war.

Meanwhile, investors are scared because of Trump’s trade war, and financial markets around the world have lost trillions of dollars or euros. In fact, European stocks dropped the most in a single day since the COVID-19 pandemic began. This could be why the EU has made this decision. Trump’s tariffs are working!

The retaliatory tariffs from the EU are still possible.

Based on trade weights, the EU only charges 1.6% in tariffs on US goods that aren’t agriculture. But it puts a 10% tax on American cars brought in from other countries. The US is the only G7 country that still pays this tariff because TTIP wasn’t finished.

Talks with Washington have been hard so far. EU Trade Commissioner Maros Sefcovic said that his two-hour meeting with US officials on Friday was frank. He told them that their taxes were harmful and unfair.

This week, the group will likely agree to the first set of countermeasures against up to $28 billion worth of US imports. This includes everything from dental floss to diamonds. These will be in response to Trump’s steel and aluminum tariffs, not the larger set of reciprocal levies.

But even that move has been troublesome. Trump has threatened to put a 200% tariff on EU alcoholic drinks if the group goes ahead with its plan to put a 50% duty on US bourbon. France and Italy, which sell a lot of wine and spirits, are worried.

In reaction to the US car and reciprocal tariffs, the 27-nation bloc is likely to come up with a bigger set of countermeasures by the end of April.

However,  if there is a war of taxes on goods, Brussels doesn’t have as much to target as Washington does. In 2024, U.S. goods imported into the EU were worth 334 billion euros ($366.2 billion), while EU exports were worth 532 billion euros. Of course, America is the one to call the shots.

Dutch Trade Minister Reinette Klever said, “We need to remain calm and respond in a way that de-escalates. The stock markets right now show what will happen if we escalate straightaway. But we will be prepared to take countermeasures if needed to get the Americans at the table.”

The EU is afraid that Asian countries will send their exports to Europe. 

The Commission worries about Trump’s choice and how it might affect international trade, especially in Asia. They also worry about the immediate effect on trade between the EU and the US, which could wipe out billions of dollars.

A lot of Asian countries have been hit harder than the group as a whole. For example, Malaysia has been hit 24%, India 26%, Indonesia 32%, Thailand 36%, Vietnam 46%, Laos 48%, and Cambodia 49%. 

China got hit with a “reciprocal” tax of 34% on top of the 20% rate they already had, for a total of 54%. In short, there have been no negotiations between the two greatest economies. 

The issue is that the prices are so high. Therefore,  Brussels is afraid that Asian countries whose economies depend on exports will not be able to get their goods into the US market and will instead send them to Europe.

China is especially scary because it is already getting a lot of attention for sending cheap, highly subsidized goods to the West. In fact, during her Monday speech, von der Leyen said that a new task force would be set up to closely watch how global trade changes.

She said, “We will also protect ourselves against indirect effects through trade diversion. For this purpose, we will set up an ‘Import Surveillance Task Force […]  We look at what are the historical imports that we have and had and (whether) there is any specific surge all of a sudden of a certain product or in a certain sector that we have to act on.” 

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