The European Commission, on 7 May 2025, initiated a public consultation regarding potential countermeasures to US President Trump's Reciprocal Tariffs and the Section 232 measures on automobiles and automotive parts, as the outcome of ongoing negotiations with the United States (US) over tariffs are uncertain.

For background on the US tariffs, see Global EY Tax Alerts: United States to impose President Trump's Reciprocal Tariffs on goods originating from the European Union, dated 3 April 2025; US President Trump announces 25% additional tariff on imported automobiles and automobile parts, dated 27 March 2025; and Recent developments in US tariffs on automobiles and articles subject to tariffs, dated 30 April 2025.

Previously, the European Union (EU) had adopted (and suspended) countermeasures against the US Section 232 Measures on Steel and Aluminum (See EY Global Tax Alert, EU publishes countermeasures against US tariffs while suspending implementation, dated 16 April 2025).

This consultation, which will remain open until 10 June 2025, seeks input on potential additional tariffs on the imports of a broad range (with a list of more than 200 pages) of industrial and agricultural products from the US with an estimated value of €95b. Additionally, the Commission is considering possible restrictions on certain EU exports of steel scrap and chemical products worth €4.4b. This list mainly contains steel and aluminum scrap and certain chemical products.

After receiving and analyzing the inputs from EU industry, the European Commission may submit a formal proposal for countermeasures to the EU Member States. The aim is to have countermeasures ready to enter into force as soon as the running negotiations with the US have come to an end without acceptable results.

Moreover, the EU is also looking into other possibilities to safeguard its industry. For example, the EU plans to formally challenge the US tariffs at the World Trade Organization (WTO), asserting that these measures violate WTO rules. The EU also continues to monitor potential market shifts of exports to the EU caused by US tariffs on third countries.

Implications

Businesses should consider reviewing the list of US products that could be subject to countermeasures (additional duties on imports) and the list of products that could be subject to export restrictions, assessing the potential impact on their supply chains.