EU chief offers US 'zero-for-zero' pact

Luxembourg: The European Union said on Monday it would start collecting retaliatory duties on some imported US goods next week, as EU trade ministers agreed they preferred negotiations to remove tariffs imposed by President Donald Trump over retaliation.

The 27-nation bloc faces 25% import tariffs on steel and aluminium and cars and "reciprocal" tariffs of 20% from Wednesday for almost all other goods under Trump's policy to hit nations he says impose high barriers to US imports. Ministers overseeing trade met Monday in Luxembourg to debate the EU's response, as well as discuss relations with China. Many said the priority was to launch negotiations and avert an outright trade war.

"We need to remain calm and respond in a way that de-escalates. The stock markets right now show what will happen if we escalate straightaway. But we will be prepared to take countermeasures if needed to get the Americans at the table," Dutch trade minister Reinette Klever told reporters.

European Commission President Ursula von der Leyen told a press conference in Brussels that the EU stood ready to negotiate a "zero-for-zero" tariff pact for industrial goods.

"Sooner or later, we will sit at the negotiation table with the US and find a mutually acceptable compromise," EU Trade Commissioner Maros Sefcovic told a news conference. He also said the EU would start would start collecting a first tranche of targeted retaliatory duties on US imports from April 15 and a second wave from May 15, in reaction to the US tariffs on European steel and aluminium.

Maros made clear that while preferring to negotiate the removal of the tariffs with the US, the EU was ready to step up its reply.

Anti-coercion instrument

This could include the EU's Anti-Coercion Instrument (ACI), which would allow it to target US services or to limit US companies' access to public procurement tenders in the EU. "We are prepared to use every tool to protect single market," he said, echoing the views of French trade minister Laurent Saint-Martin.

But some EU countries, particularly exposed to trade with the United States, urged caution. Irish foreign minister Simon Harris described the ACI as "very much the nuclear option" and said he believed most EU countries were not ready to go near it, at least for now. Outgoing German economy minister Robert Habeck said the EU should realise it was in a strong position - if it was united.

Non-tariff barriers

Meanwhile, White House trade adviser Peter Navarro said the EU will need to lower its non-tariff barriers, including those created by value-added taxes, if it wants to reach a deal to lower US tariffs.