However, the idea met a cautious response from EU countries, the diplomats said. A majority is concerned about what exactly would be targeted, and whether this could trigger further reprisals from Washington, just as the two sides try to hammer out an agreement that would spare Europe from a 30 percent import tariff on all its goods.
A first round of retaliatory tariffs, targeting €21 billion in U.S. exports, has already been approved but suspended until Aug. 6 to allow time to negotiate a deal. The Commission has proposed a second package — covering €72 billion in items such as aircraft, autos, machinery and farm produce — which awaits a green light.
America’s big transatlantic trade surplus in services — which contrasts with its chronic deficit in goods — could be its Achilles’ heel should things escalate. Targeting services has been an ongoing discussion within the bloc — but was temporarily put on the back burner as hopes rose that a preliminary agreeement was within reach.
Eye to eye?
European capitals still don’t see eye to eye on whether to raise the stakes further with Washington, after Trump threatened to triple tariffs on the bloc from the current 10 percent from Aug. 1.
One national official said that the discussion aimed at preparing the ground in case there’s no deal by that date. “Basically, if there’s no deal, don’t wait until you’re up against the wall to ask yourself the question,” they said.
Countries such as France have been pushing for Brussels to get tougher on Trump, with President Emmanuel Macron going as far as calling to invoke its Anti-Coercion Instrument — an all-purpose trade “bazooka” that could be deployed to target services.
