Brussels Suspends €21 Billion in US Tariffs While Preparing €95 Billion Retaliation

The European Commission has implemented a strategic pause in its trade retaliation measures, suspending levies on €21 billion worth of American goods until mid-July to provide additional negotiating space. However, Brussels simultaneously prepares a massive €95 billion retaliatory tariff package targeting US exports should diplomatic efforts fail.
This dual approach reflects the EU’s careful balance between diplomatic engagement and economic deterrence. The suspended tariffs demonstrate good faith in ongoing negotiations while the prepared retaliation package signals European resolve to defend its economic interests. Officials acknowledge the final retaliation amount may be smaller if approved, reflecting ongoing internal consultations.
European strategy has evolved based on previous experience, with the bloc notably abandoning earlier plans to target American bourbon after protests from France and Ireland. These countries feared retaliatory measures against French cognac and Irish whiskey exports, illustrating the complex calculations involved in designing effective counter-tariffs that minimize self-inflicted damage.
The Commission’s approach emphasizes surgical precision in selecting retaliation targets, focusing on American products where alternative suppliers exist and European consumer impact remains minimal. This methodical planning contrasts with Trump’s broader tariff threats and reflects European preference for rules-based trade enforcement even during periods of heightened commercial tension.