In a significant development, a spokesperson for the European Commission has declared that the EU is prepared to implement countermeasures against the United States following the latter’s decision to raise tariffs. This comes after US President Trump announced that, effective June 4, import tariffs on steel and aluminum will be increased from 25% to 50%. The EU spokesperson expressed profound regret over the US move, emphasizing that such tariff hikes undermine ongoing efforts to reach a negotiated settlement.
Tariff Uncertainty Sends Shocks Through Risky Assets
The uncertainty surrounding the tariffs has exerted considerable pressure on risky assets. As of the evening of May 31, within a 24 – hour period, cryptocurrencies experienced a collective decline. Bitcoin dropped by over 2.5%, Ethereum fell nearly 5%, XRP declined by 5.5%, Solana saw a drop of more than 7%, and Dogecoin plummeted nearly 10%. According to data from coinglass, in those 24 hours, the total number of contract liquidations in the cryptocurrency market exceeded 280,000, with the liquidation amount surpassing $700 million. Nearly 90% of these liquidations were long positions.
EU’s Countermeasure Preparations Unfold
On the evening of May 31 (Beijing time), the European Commission spokesperson stated that the EU is gearing up for countermeasures, directly targeting the recent US tariff increases.
As reported by Reuters, the EU Commission spokesperson said, “We strongly regret the US announcement of raising steel import tariffs. This decision adds more uncertainty to the global economy and increases costs for consumers and businesses. The tariff hike also undermines ongoing efforts to reach a negotiated solution.” The European Commission is currently in the final stages of consultations regarding the expansion of countermeasures.
The spokesperson further added, “The EU is prepared to take countermeasures, including responding to the recent US tariff hikes. The European Commission is currently finalizing consultations on expanding countermeasures. If no mutually acceptable solution is reached, existing and additional EU measures will automatically come into effect on July 14, or earlier if circumstances require.”
US Tariff Hike Announcements
US President Trump announced on May 30 (local time) that he would increase import tariffs on steel and aluminum from the current 25% to 50%. During a visit to the US Steel Corporation in Pennsylvania on the same day, Trump justified the new steel import tariffs as a measure to protect the domestic US steel industry.
Subsequently, Trump took to social media to declare that the aluminum import tariff would also be raised from 25% to 50%. Both tariff hikes on steel and aluminum are set to take effect on June 4. Additionally, the White House announced on social media the same day, “To further protect the US steel industry from foreign and unfair competition, starting next week, the US import steel tariff will be raised from 25% to 50%.”
International Reaction
On May 31 (local time), Australian Trade Minister Farrell responded, stating that Australia’s stance has been consistent and clear. He labeled the tariffs as unreasonable and unbefitting of friends. Farrell said, “This is an act of economic self – harm that will only hurt consumers and businesses that rely on free and fair trade. We will continue to push and strongly advocate for the removal of tariffs.”
EU Gains New Leverage in Trade Negotiations
An EU official involved in the trade negotiations revealed on Friday that the EU has acquired a new bargaining chip in its talks with the US, thanks to a US court’s质疑 of the legality of “reciprocal tariffs”.
The US Court of International Trade ruled on Wednesday that Trump overstepped his legal authority when implementing the “reciprocal tariff” policy and ordered an immediate halt to these tariffs. However, just one day later, the US federal appeals court temporarily reinstated the tariffs’ effectiveness.
This back – and – forth judicial uncertainty is seen by EU officials as an advantage in negotiations. “The uncertainty over the legality of’reciprocal tariffs’ undoubtedly gives us an additional negotiating advantage,” said an EU negotiator. “We will continue the negotiations, with the goal still being mutual tariff exemption.”
In early April, the Trump administration introduced so – called “reciprocal tariffs”, citing the International Emergency Economic Powers Act (IEEPA) as its legal basis at the time. This law grants the president broad powers to take economic actions in response to national security threats from foreign countries.
If the court ultimately rules that Trump’s invocation of the IEEPA to impose tariffs is illegal, the US government may turn to Section 301 of the Trade Act. Niclas Poitiers, a researcher at the EU think tank Bruegel, said: “Section 301 requires establishing facts of damage and legal basis, and it takes several months. From an administrative perspective, they might still push forward forcefully because the current US system of checks and balances is weak, but it won’t be as quick or simple as (invoking) the IEEPA.” He added: “At least this can buy some time for the EU.”
EU’s Negotiation Stance
EU officials emphasized that the EU is willing to discuss certain non – tariff barriers with the US but will not make concessions on issues such as value – added tax, digital tax, or food safety standards.
The next round of EU – US trade talks is scheduled to take place during the OECD ministerial meeting in Paris from June 3 – 4. EU officials pointed out that the US court ruling validates the EU’s previous stance that the Trump administration’s imposition of “reciprocal tariffs” on the EU and other countries since April 2 was unjustified.
Critical Stage of EU – US Trade Negotiations
On May 30 (local time), Valdis Dombrovskis, the European Commission’s Commissioner for Economic Affairs, stated that despite the increasingly complex global situation, the EU remains committed to its outward – opening strategy. The current EU – US trade negotiations are at a critical juncture, with both sides striving to reach an agreement before July 9. Dombrovskis said that the EU is always committed to finding a negotiated solution with the US. However, the future of EU – US trade negotiations remains fraught with numerous uncertainties.
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