The European Union has the tools to respond to the United States’ new round of tariffs, French Trade Minister Nicolas Faucier told the Financial Times, calling on EU countries to adopt a “common approach” to the imposition of an additional 15% tariff on imports announced by Donald Trump in response to the US Supreme Court’s condemnation of his tariff policy.
The French trade minister told the FT he was in discussions with his European Union counterparts and the European Commission about Trump’s decision.
“If needed, the European Union has the right tools,” said France’s Nicolas Faucier.
French officials said it was too early to speculate on the European Union’s response, but alternatives included the “trade bazooka”, the EU’s Anti-Coercion Instrument (ACI), which could hit US tech companies.
The ACI has a wide range of measures, from export controls to the imposition of tariffs on services and the exclusion of US companies from EU supply contracts.
There is also a package of retaliatory tariffs of more than €90 billion on US goods that could be imposed.
The French minister said Trump’s threats have strengthened the unity of the European Union, but the bloc must be ready to fight back. “We can no longer be naive. We need to use our tools and not just talk about them. We don’t want to be dependent. We don’t want to be a kind of hostage,” he said.
The European Parliament will meet on Monday to discuss further delaying the ratification of a trade deal agreed with Washington last year.
Trump is raising tariffs despite the fact that they are driving up prices and hurting companies that depend on exports.
Fabio Panetta, governor of the Bank of Italy, said during a press conference today in Venice: “Initially, the impact was absorbed by the profit margins of American businesses and then passed on to consumers, who now bear half of them.”
“Overall, tariffs are estimated to have contributed more than half a percentage point to inflation, which remains above the Federal Reserve’s target,” at 2.4% in January.
India’s commerce ministry said it was “studying all these developments and their implications”.
