Germany and France Push EU to Prepare Retaliatory Tariffs Against the U.S. – A Trade War Escalation
- Why Are Germany and France Leading the Charge Against the U.S.?
- What Is the Anti-Coercion Instrument (ACI) and Why Is It Controversial?
- The EU’s Two-Stage Tariff Plan: Targeting $100 Billion in U.S. Goods
- Why Did Trump Reject the EU’s Proposed Compromise?
- FAQ: Your Burning Questions Answered
In a dramatic shift, Germany and France are rallying the EU to adopt hardline measures against the U.S., including unprecedented tariffs and the activation of the Anti-Coercion Instrument (ACI). With Trump’s threat of 30% reciprocal tariffs by August 1, tensions have reached a boiling point. This article breaks down the EU’s two-stage tariff plan targeting $100 billion in U.S. goods, the divisive ACI mechanism, and the high-stakes negotiations that could redefine transatlantic trade. --- ###
Why Are Germany and France Leading the Charge Against the U.S.?
Germany and France have abandoned their earlier calls for patience, now urging the EU to adopt retaliatory tariffs and the ACI—a never-before-used tool designed to counter economic coercion. The trigger? A recent letter from the TRUMP administration threatening to raise tariffs to 30% by August 1, up from the current 20%. As one EU diplomat put it, "Germany did a 180 in just days." The urgency stems from fears that the EU will appear weak without leverage. French President Emmanuel Macron’s meeting with German Chancellor Friedrich Merz in Berlin this Wednesday underscores the gravity of the situation.
--- ###What Is the Anti-Coercion Instrument (ACI) and Why Is It Controversial?
The ACI WOULD allow the EU to ban U.S. firms from public contracts, revoke intellectual property protections, and freeze trade in key sectors. While Germany and France back the plan, a "silent majority" of EU members oppose it, calling it a "nuclear option." Critics argue the situation is too fluid for such drastic measures. However, if activated, the ACI would begin with an investigation into U.S. coercion, followed by calibrated sanctions—ranging from a "sniper rifle to a bazooka," as one diplomat quipped.
--- ###The EU’s Two-Stage Tariff Plan: Targeting $100 Billion in U.S. Goods
The EU has a more traditional response ready if the U.S. doesn’t back down by August 1: 1. First Wave (€21 billion): Tariffs on U.S. imports like chicken and jeans, effective August 6. 2. Second Wave (€72 billion): Targets Boeing aircraft and bourbon, with a vote scheduled for August 6 and implementation the next day. A third list targeting U.S. tech and digital services (e.g., ad revenue taxes) is also in the works. Despite the aggressive stance, EU officials hope the U.S. will "blink first" to avoid a trade spiral.
--- ###Why Did Trump Reject the EU’s Proposed Compromise?
The U.S. dismissed an EU framework that would have locked tariffs at 10%, insisting on a permanent 15%+ rate. The EU’s requests for exemptions on auto parts (25% tariff) and steel/aluminum (50%) were also rejected. U.S. Treasury Secretary Scott Bessent’s comment that tariffs would "boomerang back" at reciprocal levels only hardened Brussels’ resolve. As of now, no formal retaliation has begun, but Olof Gill, the EU trade spokesperson, emphasized negotiations remain the priority—for now.
--- ###FAQ: Your Burning Questions Answered
What is the Anti-Coercion Instrument (ACI)?
The ACI is an EU mechanism to counter foreign economic pressure by sanctioning coercive governments, including trade freezes and IP revocations.
When will the EU’s tariffs take effect?
The first wave starts August 6; the second could launch August 7 if approved.
Why is Germany suddenly supporting hardline measures?
Trump’s 30% tariff threat forced Berlin’s hand, fearing the EU would lose leverage without a strong response.
