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By Shane Croucher
Senior Editor
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The European Union (EU) is considering a response to President Donald Trump's tariffs that goes beyond customs duties on American goods, the French finance minister warned.
"The response can be very vigorous," Eric Lombard told France's BFM/RMC. He said the EU was looking at greater taxation and regulation of digital services, for example, though he stressed that the European response will be "proportionate."
Lombard said "we want to de-escalate as quickly as possible" and that will be Europe's first priority as the tariffs are implemented, but those negotiations with the U.S. must be conducted as equals.
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Why it Matters
These tariffs and others imposed by Trump all over the world threaten to trigger a recession in the U.S. and elsewhere. Stock markets have dived as a result.
It also creates a domestic political problem for Trump, who campaigned for the White House on how he would be a far better steward of America's vast economy than his opponent. Now, his polling numbers on the economy are slipping.
The tariff war also adds to the tensions in the transatlantic relationship, which spans issues such as trade, defense and security, and how to settle the Ukraine war.
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What to Know
Trump hit EU imports with a 20 percent tariff on April 2. He accused the EU of tariff measures against the U.S. that equate to 39 percent. He had already hit auto imports, including vehicles and parts, with a 25 percent tariff, as well as aluminum and steel.
The EU has threatened to impose sprawling tariffs on U.S. goods imports from mid-April in response. Lombard is suggesting the EU may also target American technology giants with non-tariff measures to impose an additional cost on the U.S.
The American president has signaled that he is open to negotiations.
Trump's tariffs have two main purposes. The first is to protect U.S. firms from what he sees as unfair global competition. He wants to pull more investment into the U.S.
The second is to force trading partners into better terms that give greater access to their markets for American businesses. He sees the current terms as unequal and putting U.S. firms at a disadvantage.
But his critics say his tariffs are damaging important relationships with America's allies and partners, and ultimately hurting the economy—the world's largest—rather than helping it.
What People Are Saying
Donald Trump told reporters on Air Force One he is open to doing deals on tariffs: "If somebody said that we're going to give you something that's so phenomenal, as long as they're giving us something that's good."
Eric Lombard told French media: "Donald Trump's usual attitude—he is a negotiator. He has put an aggressive proposal on the table. We will respond to it.
"There are many European Union meetings starting Monday...in order to build...a response that must be proportionate, but that should lead us to the negotiation table."
Republican Senator Mitch McConnell from Kentucky said in a statement: "As I have always warned, tariffs are bad policy, and trade wars with our partners hurt working people most. Tariffs drive up the cost of goods and services. They are a tax on everyday working Americans."
What's Next
The EU will meet in the coming days to firm up its response to Trump's tariffs. But both sides have made clear they are willing to negotiate.
There may still be a path to a deal that reduces the burden of tariffs for businesses and consumers on either side of the Atlantic—and soothes some of the markets' worst fears for their economies.
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