EU Weighs New Tariffs on US Aircraft and Cars as Trade Tensions Rise
The European Union is preparing a new round of tariffs on US exports, escalating the ongoing US-EU trade war and putting pressure on President Donald Trump to reconsider his blanket import duties. The latest move could hit major US industries, especially aircraft and car makers, as Brussels broadens its list of potential targets amid deepening trade disputes.
Why Is the EU Proposing New Tariffs on US Exports?
After the US imposed a universal 20% tariff on a wide range of goods from the EU, the bloc is seeking leverage to bring the White House back to the negotiating table. Top EU officials say the new plan to target US aircraft, car exports, chemicals, electronics, health products, and foods is a response to maintain balance, not simply to retaliate dollar-for-dollar.
EU Commission President Ursula von der Leyen stated, “We continue preparing for all possibilities,” ensuring businesses and consumers on both sides are protected. Brussels is determined not to accept unfair trade terms and is signalling it will defend EU interests with targeted countermeasures if necessary.
How Would These EU Tariffs on US Exports Work?
The potential new EU tariffs on US exports cover some of America’s most valuable exports to Europe. Major categories include:
- Aircraft: Boeing, based in Seattle, faces serious risks, with €10.5bn of US planes sold to EU clients in 2024. Ireland, home to companies like Ryanair and Aercap, could be indirectly affected, as they have billions of dollars in existing orders.
- Cars and Car Parts: US exports to the EU amounted to €12.5bn last year. Any new tariffs could disrupt established supply chains and push up costs for European consumers.
- Machinery and Electro Equipment: Computer screens, cameras, and other items worth €7.2bn are on the list, expanding the impact beyond traditional goods.
- Agrifood Products: US foods, including sweet potato and nuts, plus health products, may soon be caught in the widening net of the US-EU trade war.
These tariffs are not set-in-stone. EU officials are currently consulting with member states until 10 June, with decisions on exact categories and the level of duties due by early July, just before Trump’s 90-day pause on universal tariffs expires.
Impact on US Businesses and European Imports
Boeing and US Aircraft at Risk
If the EU’s list goes into effect, aircraft manufacturers like Boeing would see new tariffs apply on the date of each plane’s delivery. Large European customers such as Ryanair have already hinted they could rethink future aircraft orders and look to competitors outside the US. Ireland’s position is especially delicate, with major leasing operations and pharma exports under threat from US retaliation.
US Cars and Machinery Under Pressure
The EU has not promised a like-for-like match on tariffs, especially where US measures have already hit European automakers hard. Instead, Brussels could impose higher rates on smaller volumes or spread out lighter tariffs over more products, aiming for a “smart tariffs” approach that places maximum pressure where it counts, without harming European industry more than necessary.
Broader Trade Effects
US chemicals, tech hardware, and even camera equipment face exposure. The current list follows a previously announced (but paused) €21bn package of retaliatory tariffs, including taxes on iconic American exports such as Harley-Davidsons and poultry.
EU officials have also threatened to extend measures to US services, including tech and social media firms like Microsoft and Meta. While Brussels has announced no firm plans, it is keeping all options on the table.
Context Behind the US-EU Trade War
Trump’s Tariffs and Shifting Global Alliances
President Trump maintains the EU has treated the US “extremely unfairly,” citing the US-UK deal as a model for partnerships possible after Brexit. The US has already imposed 25% tariffs on European cars and a blanket 20% tariff on a wide range of other imports.
Meanwhile, the US appears to have softened its stance on China, sending Treasury Secretary Scott Bessent and chief negotiator Jamieson Greer to Switzerland for new trade talks. The EU has issued its latest threats as protectionist policies on both sides test the transatlantic relationship.
EU’s Strategy: Smart Tariffs Over Blanket Retaliation
Rather than a blunt, sector-wide retaliation, the EU hints at placing duties in politically sensitive sectors, particularly those in Republican-leaning states or associated with iconic US brands. The mix of agricultural and industrial exports targeted reflects the EU’s desire to exert maximum influence with minimal damage to its own economy.
Officials say, “We could do higher tariffs on less trade … or we can do lower tariffs on more trade.” The hope is this flexibility will enable targeted pressure without causing unnecessary disruption in Europe.
EU Prepares for Tariff Action Amid Transatlantic Trade Uncertainty
Brussels has started a four-week consultation with member states, collecting feedback until 10 June before finalising its new tariff list in early July. This timeline coincides with the possible end of President Trump’s 90-day pause on his universal reciprocal 20% tariff.
If transatlantic trade talks fail, the EU plans to enact tariffs immediately upon aircraft delivery or on other goods once it finalises the list. The EU has also signalled that including services, such as digital and financial services, remains a possible next step.
Source
The Guardian – EU targets US aircraft and car exports in new list of potential tariffs
Explore more entrepreneurial insights and success stories at Inspirepreneur, your go-to magazine for business innovation and leadership.
