EU ready to retaliate against U.S. tariffs but seeks a deal, says von der Leyen

The European Union is prepared to retaliate against U.S. tariffs but prefers a negotiated resolution, European Commission President Ursula von der Leyen said. She warned that U.S. tariffs would fuel inflation and harm jobs while urging the EU to remove internal trade barriers.

The European Union has a "robust plan" to respond to tariffs imposed and due to be imposed by U.S. President Donald Trump, although it would prefer to reach a negotiated settlement, European Commission President Ursula von der Leyen stated on Tuesday.

The Trump administration introduced tariffs on imported steel and aluminium in March, with higher duties on cars set to come into force on Thursday. Additionally, Trump is expected to outline plans for "reciprocal tariffs" on Wednesday.

Von der Leyen acknowledged U.S. concerns that global trade rules had been exploited by certain countries, noting that the EU had also faced similar challenges. She further recognised the U.S. ambition to re-industrialise, a goal shared by the EU.

However, she argued that U.S. tariffs effectively serve as taxes on its own consumers, exacerbating inflation and increasing costs for American manufacturers reliant on imported components, ultimately leading to job losses.

"Our aim is a negotiated resolution. However, if necessary, we will safeguard our interests, our citizens, and our businesses," von der Leyen said in an address to the European Parliament in Strasbourg.

"We do not seek retaliation, but if required, we have a robust response plan, and we will implement it."

Von der Leyen also stressed the need for the EU to diversify its trade and eliminate internal barriers that hinder cross-border commerce within its single market.

She cited the International Monetary Fund's assessment that Europe’s internal market barriers equate to a 45% tariff on manufacturing and 110% on services.

Addressing EU lawmakers, she stated that the Commission would present proposals next month aimed at dismantling some of these barriers and preventing the emergence of new ones.

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