EU’s Tariff Hits Targeting US Services: A $845 Billion Trade War Escalation

• Why is the EU targeting $845 billion in US goods?
• Trump's tariff rollercoaster: From 20% to 30% in three months
• How Brussels plans to counterpunch
• The steel war that started it all
• Why Šefčovič says the EU must act
• The global tariff domino effect
• Tech sector in the crossfire?
• Market reactions tell the story
• Frequently Asked Questions

The EU is preparing retaliatory tariffs on $845 billion worth of US goods, escalating a trade war that began with Trump's 30% tariff threat. This article breaks down the key battlegrounds—from bourbon to Boeing—and why Brussels insists it's fighting to "rebalance" transatlantic trade. With deadlines looming and markets jittery, we analyze the economic stakes, historical context, and potential fallout.

Why is the EU targeting $845 billion in US goods?

According to insider sources, the European Commission is drafting export control measures covering US goods valued at 845 billion USD (approximately 74 billion EUR). The proposed hit list—still undisclosed to EU member states—reportedly includes iconic American exports like automobiles and Kentucky bourbon. This move comes as a direct counter to Washington's aggressive tariff policies under the TRUMP administration.

Trump's tariff rollercoaster: From 20% to 30% in three months

The trade spat began in April when Trump first floated 20% tariffs on EU products, later temporarily reducing them to 10%. On Sunday, he abruptly escalated to 30% tariffs effective August 1st, claiming this WOULD "rebalance the deficit" between the US and EU. The announcement sent French and German bond yields spiking to levels last seen during the 2009-2011 Eurozone debt crisis, while investors grew nervous about the future of the $1.7 trillion transatlantic trade partnership.

How Brussels plans to counterpunch

EU Trade Commissioner Maroš Šefčovič warned that new tariffs would make normal transatlantic trade "almost impossible." While the EU previously negotiated to maintain 10% tariffs with exemptions for key exports like automobiles, the latest US MOVE has complicated talks. Brussels now prepares to target approximately 11 billion EUR ($13 billion) in US aircraft and parts if negotiations collapse by August 1st. The retaliation list may expand to include machinery, electrical goods, chemicals, produce, and spirits—with bourbon squarely in the crosshairs.

The steel war that started it all

This conflict traces back to Trump's 25% tariffs on European steel, aluminum, and automobiles—measures Brussels initially countered with $23.8 billion in retaliatory tariffs on US goods, calling them "unjustified and harmful." The EU later suspended these tariffs during negotiations as a goodwill gesture. In April, Commission President Ursula von der Leyen proposed a tariff-free deal for industrial goods, which Trump rejected as insufficient for addressing the trade imbalance.

Why Šefčovič says the EU must act

"We need to protect the EU economy," Šefčovič stated, while emphasizing efforts to avoid a "super negative scenario." The Commissioner confirmed preparations for retaliatory tariffs should talks fail, though he stressed the priority remains reaching a negotiated solution. Industry analysts note the EU's targeted approach—focusing on politically sensitive US exports—mirrors Washington's own playbook in trade disputes.

The global tariff domino effect

Beyond the EU, the Trump administration has threatened at least 20 other trading partners with increased tariffs, including Canada, Japan, South Korea, Indonesia, and Brazil. Most dramatically, Washington warned of potential 50% tariffs on all copper imports—a move that could roil global commodity markets. As one trade expert quipped, "This isn't just a trade war—it's tariff Armageddon."

Tech sector in the crossfire?

Insiders suggest the EU may include measures targeting US tech companies in its retaliation package. However, any final tariff list requires approval from the Commission's Trade Policy Committee before implementation. With the August 1 deadline approaching, businesses on both sides of the Atlantic are bracing for impact—and hoping for an 11th-hour deal.

Market reactions tell the story

The mere threat of escalated tariffs has already moved markets significantly. Bond yields in Europe spiked, while US agricultural futures dipped on concerns about lost EU exports. "This isn't 2018 anymore," noted a BTCC market analyst. "Markets are pricing in prolonged disruption, not just temporary skirmishes."