The European Union is trying to settle the tit-for-tat tariff war between it and the US. It shared a trade proposal with Washington earlier this week that outlined mutual investment and procurement plans in artificial intelligence, digital connectivity, and other sectors, anonymous sources told Bloomberg.
The paper also suggests slowly removing tariffs on both sides for certain agricultural and industrial goods, and working together to tackle overcapacity issues in supply chains for semiconductors, as well as steel, pharmaceuticals, and automotive products. It takes into account US priorities, such as workers’ rights, environmental standards, and economic security.
The sources said that the EU would like to strike a mutually beneficial deal with the US, but officials are unsure that US President Trump has the same goals. According to Bloomberg, officials have been emphasising to their American counterparts that the two economies are deeply intertwined, and that reaching a deal should be a shared priority
Formal negotiations have not begun as the European Commission would likely need a mandate from the member states to do so, the sources said. However, by submitting the paper, the EU is signalling its readiness to engage. At the same time, the EU is preparing retaliatory measures in case a satisfactory deal cannot be reached. The sources said discussions around the proposal are ongoing, and the two nations will meet in early June.
The US-EU trade war timeline: How we’ve arrived at the proposal
Trump has been threatening the EU with tariffs even before his second inauguration, taking issue with its trade surplus in cars, agriculture, oil, and gas, but the battle properly kicked off in March this year.
- March 12, 2025: The US’s expanded tariffs on steel and aluminium imports took effect, both set at 25%. On the same day, the EU threatened countermeasures targeting alcohol and other industrial and agricultural goods from the US.
- March 13, 2025: The US president retaliated by threatening 200% tariffs on EU alcohol in a statement issued via social media.
- March 20, 2025: The EU dropped its alcohol tariffs and postponed the others until mid-April.
- March 27, 2025: The US imposed a 25% tariff on global car imports, a move that disproportionately affected Germany, the world’s largest automotive exporter.
- April 2, 2025: President Trump announced sweeping “reciprocal tariffs,” which included a 20% tariff on all imports from the EU.
- April 9, 2025: The EU prepared 25% retaliatory tariffs targeting €21 billion worth of US goods, set to take effect on April 15. President Trump announced a 90-day suspension of the reciprocal tariffs, temporarily halving the 20% tariff on EU imports to 10%.
- April 10, 2025: The EU suspends its countermeasure plans for 90 days, with hopes of negotiating a trade agreement during the pause.
During the ongoing negotiation period, Trump has confirmed that he would reinstate reciprocal tariffs on semiconductors and pharmaceuticals, and threatened additional tariffs on sectors such as film industry. Several EU member states have urged the Commission to retaliate should these come to fruition.
On May 8, the EU proposed a list of €95 billion worth of US products that could face tariffs if talks fail. This list includes cars, aircraft, electrical equipment, alcohol, fish, chemicals, and other key exports. Washington has struck deals with both the UK and China this month, suggesting that Trump is open to compromise, but, according to Bloomberg, the EU has no intention of accepting terms similar to those offered to other countries.
The Trump administration has submitted a paper to the EU’s executive arm as part of ongoing negotiations, Bloomberg says. However, an EU official dismissed it as a “wishlist” of unrealistic demands, criticising it for targeting non-negotiable areas such as the bloc’s digital regulations.
Trump has previously criticised the EU for its regulatory stance against Apple, Google, Meta, and other US tech firms. At the World Economic Forum in January, he said, “they’re American companies, and they shouldn’t be doing that,” and that “it’s a form of taxation,” while Vice President JD Vance disparaged Europe’s use of “excessive regulation” at the Paris AI Summit in February.
