The European Union has pushed back the implementation of its retaliatory tariffs on U.S. goods to mid-April, a move aimed at allowing more time for negotiations with Washington. The tariffs, which were originally scheduled to take effect in two phases on April 1 and April 13, were designed to counter the Biden administration’s 25% duties on European steel and aluminium.
According to European Commission spokesperson Olof Gill, the delay is intended to synchronise the two rounds of tariffs, ensuring that EU member states are consulted on the full package simultaneously. “By aligning the timelines, the Commission consults with Member States on both lists simultaneously,” Gill said. “This provides additional time for discussions with the US administration.”
Scope of the Tariffs and Economic Implications
The EU’s countermeasures target approximately €26 billion (NZD $49 billion) worth of American exports, including bourbon, motorbikes, poultry, beef, soybeans, and raspberries. Initially, the tariffs were to be imposed in stages: the first phase focused on whiskey, motorcycles, and motorboats, while the second phase would have included beer, agricultural products, and industrial goods.
Despite the delay, EU officials emphasised that the move would not weaken the bloc’s response. “The change represents a slight adjustment to the timeline and does not diminish the impact of our response,” Gill stated.
The economic fallout from the tariffs could be significant. American whiskey producers, in particular, have expressed concerns about the potential damage of a 50% tariff on their exports to Europe. Chris Swonger, president and CEO of the Distilled Spirits Council, welcomed the delay, saying it “gives US distillers a glimmer of hope that a devastating 50% tariff on American whiskey can be averted.”
The trade measures could also hit U.S. agriculture, with American farmers facing reduced competitiveness in Europe due to increased costs on exports like soybeans and beef. European businesses, meanwhile, could experience higher import costs for U.S. products, affecting industries reliant on American raw materials.
Political and Diplomatic Calculations
The delay is widely seen as a strategic move by Brussels to keep diplomatic channels open while avoiding immediate escalation. EU Trade Commissioner Maroš Šefčovič emphasised the need for a flexible approach, given the volatile nature of transatlantic trade relations. “We will need to assess the action [taken] by the U.S. and keep a flexible approach so as to calibrate our response accordingly,” Šefčovič said.
April 2 is a key date, as President Donald Trump is expected to announce a new set of reciprocal tariffs on imports from multiple countries, including European nations. The U.S. has already hinted at possible increases on lumber, autos, and copper, further escalating trade tensions.
Trump has also threatened a 200% tariff on European wine and spirits if the EU proceeds with its planned countermeasures. “If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.,” Trump wrote on Truth Social.
Mixed Reactions from Industry and Government Officials
Reactions to the EU’s delay have been mixed. European businesses and leaders from France, Italy, and Ireland have voiced concerns over the bloc’s handling of the tariffs, particularly after Trump’s threat to target the European alcohol industry. French Prime Minister François Bayrou criticised the EU’s approach, arguing that it could disproportionately harm European industries.
Irish Prime Minister Micheál Martin, however, called the decision a “wise and strategic response”, emphasising that more time would allow the EU to negotiate from a stronger position.
Meanwhile, some trade analysts caution that the delay could create further uncertainty for businesses on both sides of the Atlantic. “It’s not a question of whether the EU will soon be subjected to higher tariffs. Rather, it’s a matter of how high they’ll go,” said a report from TD Cowen.
What Comes Next?
Several scenarios could unfold in the coming weeks. If negotiations between the U.S. and the EU are successful, a compromise could lead to a reduction or removal of tariffs before mid-April. However, if talks break down, both sides could double down on their trade barriers, pushing transatlantic relations into a full-blown trade war.
Another possibility is a continued delay, leaving businesses in a prolonged state of uncertainty. The EU has signalled that it will reassess its stance after Trump’s tariff announcement on April 2.