The European Union is done playing defense. Sources familiar with the matter say Brussels is preparing to slap tariffs on about €100 billion ($113 billion) worth of US exports if current trade talks with Washington stall. The draft retaliation list—expected to land on member states' desks this week—will go through a one-month consultation before being finalized. While the list remains fluid, it signals the EU is ready to escalate. This would come on top of the €21 billion in US goods already facing EU levies from the earlier steel and aluminum fight.
Progress on negotiations? Almost nonexistent. Despite a recent US move to drop reciprocal tariffs on EU goods from 20% to 10%, the European Commission isn't convinced it's enough. With Trump's new investigations threatening to balloon the number of EU exports under tariff to €549 billion, the bloc is bracing for the worst. Brussels is floating a paper to Washington aimed at lowering trade barriers and boosting investment—but few expect a breakthrough. Behind the scenes, officials are preparing for a long, grinding standoff.
And that's not all. The EU isn't stopping at goods—services and high-value exports like tech, pharma, and even semiconductors could be next on the chopping block. Brussels knows it has leverage, backed by a €48 billion trade surplus in goods and services. If this turns into a full-scale economic slugfest, investors should expect ripple effects across supply chains, corporate margins, and market sentiment. The message from Europe? Play fair—or get hit.
