EU Considers Tariffs on American Cars and Aircraft Amid Trade Tensions

Thu 8th May, 2025

The European Commission is preparing to impose additional tariffs on US exports worth up to EUR95 billion, as part of escalating trade tensions with the United States. This announcement comes in the wake of ongoing negotiations that have not yet yielded a resolution, with potential tariffs targeting a range of products including automobiles, agricultural goods, whiskey, and various industrial items.

European Commission President Ursula von der Leyen emphasized the EU's commitment to reaching a negotiated solution with the US, while also preparing for all possible outcomes. The proposed tariffs are seen as a strategic move to impact products for which alternative suppliers exist, ensuring that essential goods would not be affected. Notably, pharmaceuticals are excluded from the list of targeted items.

The proposed list includes a diverse array of products, ranging from automobiles and aircraft parts to food items like sweet potatoes and even human hair for wigs. These measures are currently under discussion with the 27 EU member states, who must reach a consensus before any tariffs are officially implemented.

US President Donald Trump has initiated a series of substantial tariffs, which have sparked a global trade conflict. In April, he announced a general tariff of 20% on EU goods, which was later reduced to 10%. Additionally, tariffs of 25% have been levied on steel, aluminum, and vehicles, measures that the EU argues violate fundamental World Trade Organization (WTO) rules.

In response to Trump's aggressive tariff policies, a study revealed that a significant number of German companies are pivoting their investment strategies to focus more on domestic operations. According to the consulting firm Deloitte, 80% of financial executives in Germany now prioritize investments within Germany, compared to 73% prior to the tariff announcements.

As the situation unfolds, it remains unclear how the US's trade policies will affect global supply chains and economic stability. Many analysts predict that the uncertainty surrounding tariffs will continue to hinder investment decisions and market confidence across various sectors.

In related developments, the US and UK have reportedly reached a comprehensive trade agreement, which may alter the dynamics of future negotiations between the US and the EU. This agreement, which is expected to be formally announced soon, could provide the UK with certain exemptions from the tariffs imposed by the US.

As the EU prepares to take further steps in the trade conflict, the focus remains on finding a balanced approach that allows for fair trade practices while minimizing disruption to both economies. The EU aims to ensure that the negotiations lead to a resolution that upholds its interests and promotes economic stability on both sides of the Atlantic.


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