The European Union is ready to use its most powerful economic weapon, the bloc’s trade chief has warned, amid soaring tensions ahead of his first meeting with US President Donald Trump’s new commerce team.
Visiting Washington to try to avert a transatlantic trade war, Maros Sefcovic said he hoped to offer Trump a deal that would stave off the imposition of already-threatened tariffs.
“I know that President Trump is a big deal maker and there was an idea to have [a] kind of impressive grand bargain package. So let’s discuss all these things,” said Sefcovic on Wednesday, calling himself “a true believer” in the transatlantic relationship.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
Should a deal not materialise, the EU’s commissioner for trade and economic security made clear that the bloc had plenty of punitive tools in its armoury.
“Our openness does not mean we will not protect our interests and our European market when necessary,” Sefcovic said.
“For instance, we have the anti-coercion instrument to protect the EU from economic coercion by third countries,” he added. “The range of countermeasures is broad and can be deployed swiftly, including import and export restrictions, limitations on access to the EU market and more.”
The instrument is often referred to in Brussels as its “trade bazooka’ and was initially conceived as a response to Trump’s tariffs under Section 301 of the US Trade Act of 1974 during his first presidential term.
However, its development gained popular support in 2021 following Trump’s exit from the White House and Lithuania complaining that China had put an unofficial trade embargo on its exports there after it deepened ties with Taiwan.
Beijing sees Taiwan as part of China to be reunited by force if necessary.
Most countries, including the US, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons.
Known as the ACI, the instrument was eventually adopted in 2022, but since it cannot be used retrospectively, it has never been deployed.
It is viewed as one of the most powerful weapons the EU possesses, for it can quickly block foreign firms from its giant market in response to political bullying.
Trump has pledged to put tariffs on steel and aluminium tariffs that would affect the EU.
The bloc would also be heavily affected by a move to slap reciprocal tariffs on trading partners. This would hit Europe’s automotive industry, a sector in which the relatively liberal trading union retains import tariffs.
US officials, meanwhile, have continually railed against Europe’s digital laws, which force Silicon Valley social networks and online marketplaces to adhere to stringent rules on content moderation and user protection.
As speculation swirls that Trump could use asymmetrical measures to force the EU to drop its digital laws, the ACI has been widely touted as a possible retaliatory measure.
Sefcovic said the car duties were on the table amid reports the EU would substantially lower them to avoid Trump’s wrath. The Slovakian is also expected to offer to buy more American gas in a bid to run down a trade-in-goods deficit against which Trump has frequently denounced.
“So if we are going to talk about lowering the tariffs, even eliminating the tariffs, let’s say for industrial products, this will be something which we are ready to discuss ... including [being] ready to look at the tariffs for cars,” he said.
Sefcovic previously said he wanted to pitch joint work on China to Trump’s team in the hope it was one area of common ground.
At the European Parliament last month, he said the EU should be “ready to explore deeper EU-US cooperation on economic security, an area where both the EU and the US want to progress, including on how to deal with the joint challenges coming from China’s non-market policies and practices”.
But behind the scenes, officials and diplomats have grown gloomy about the prospects of success, pointing to the increasing bellicosity of Trump’s positions towards Europe in recent weeks.
Speaking on Tuesday about the EU trade chief’s visit, Trump described the bloc as having been “very unfair to us”.
“We have a deficit of US$350 billion,” he said. “They don’t take our cars. They don’t take our farm products. They don’t take almost anything. They take very little. We’re going to have to straighten that out and we will. I have no doubt about it.”
In 2024, the US goods trade deficit with the EU stood at US$235.6 billion, up 12. 9 per cent from 2023, according to the Office of the US Trade Representative.
And a large US surplus in services has resulted in the EU holding a relatively narrow trade surplus overall at US$50 billion, Sefcovic said on Wednesday.
While trade is one area of major grievance between the two sides, tensions have flared over geopolitics too, with divisions growing deeper by the day.
America’s apparently Russia-friendly position in the war with Ukraine has rankled Europeans.
Governments were stunned after Trump’s top officials said they would be excluded from negotiations on ending the war in Ukraine, even though they would be expected to police the ceasefire.
On Tuesday, the American president accused Ukraine of starting the war, which was in reality launched by a full-scale Russian invasion three years ago. After Ukrainian President Volodymyr Zelensky accused him of repeating Russian disinformation, Trump called him a dictator.
“A dictator without elections, Zelensky better move fast or he is not going to have a country left,” Trump wrote on social media on Wednesday.
More from South China Morning Post:
- US Senate confirms Howard Lutnick as commerce secretary
- Former UK PM John Major warns of ‘more dangerous’ world if US abandons allies
- Trump unveils reciprocal blanket tariffs review of all major US trading partners
- Transatlantic trade war nears as Trump and EU clash over metals tariffs and digital laws
- Donald Trump slaps 25% tariffs on steel and aluminium imports with ‘no exceptions’
For the latest news from the South China Morning Post download our mobile app. Copyright 2025.
