On March 21, 2025, the European Union announced it would delay its first countermeasures against U.S. steel and aluminum tariffs, with the new implementation date set for mid-April. The first round of countermeasures, originally scheduled to begin on April 1, would affect U.S. products valued at 4.5 billion euros, while the second round on April 13 would impose tariffs on U.S. products valued at 18 billion euros. The European Commission stated that the delay was to allow for more time to negotiate and to consult with member states on the best response strategy. EU Trade Commissioner Šefčovič said the move is intended to create space for negotiations with the U.S. in order to avoid further escalation of trade tensions.
However, the hardline stance of the U.S. government remains unchanged. The Trump administration has not only threatened to impose tariffs of up to 200% on EU wines and other alcoholic beverages but also plans to implement "reciprocal" tariffs on April 2 to achieve global trade balance through tariff policy. Šefčovič revealed that current negotiations with the U.S. have made limited progress, and the U.S. seems more inclined to use tariff policy to attract investment and promote reindustrialization rather than resolve disputes through negotiation.
Within the EU, there are differing opinions on how to respond to U.S. tariff policy. French Prime Minister Beru believes that targeting American whiskey might lead to miscalculation, while Italian Prime Minister Meloni warns against escalating trade disputes with the U.S., emphasizing the importance of maintaining good relations. Irish Prime Minister Martin supports the decision to delay countermeasures, believing it will help assess U.S. policy and make a more rational strategic response.
Overall, the EU's decision to delay countermeasures against the U.S. reflects its cautious attitude in the trade war. Despite internal differences, the EU still hopes to alleviate tensions with the U.S. through negotiations. However, the U.S.'s hardline stance and tariff policy cast uncertainty over the negotiation prospects. The future direction of the U.S.-EU trade war will depend on whether both sides can find a balance point to prevent further escalation of the conflict.
In the short term, the euro may face downward pressure due to uncertainties in the trade war. However, if the negotiations make positive progress, the euro is likely to rebound. Investors need to closely monitor the progress of negotiations and the release of related economic data.
