How can the EU respond to Trump tariffs?

The EU says "everything is on the table" as it prepares its response to President Donald Trump's sweeping new tariffs should talks with Washington fail. Should they tax more American goods, or even target Big Tech?

The European Commission, in charge of the EU's trade policy, refuses to give any details on what its response to Trump's 20 percent tariffs starting April 9 could include.

But France, Germany and Austria have suggested targeting the biggest digital companies, including Google and Facebook owner Meta. 

These are the options the 27-country European Union has been discussing:

TARIFFS

When Trump hit steel and aluminium imports with a 25 percent tariff in March, the EU decided to take "an eye for an eye" approach.

Since his extra levies would affect around $28 billion of the EU's exports, Brussels opted to target U.S. goods worth the same amount from mid-April, including Harley Davidson motorbikes as well as agricultural products like soybeans and meat.

Now the EU faces new tariffs of 20 percent announced by Trump this week, which has kickstarted another conversation inside the bloc about further retaliatory action.

"We will react in areas where it hurts the United States," a senior EU official said.

Officials have previously said the EU will target goods from politically important U.S. states, including soybeans produced in Louisiana, the home of U.S. Speaker Mike Johnson.

"We love soybeans, but we can get them from Brazil," the official said. "We like Harley-Davidsons, but we also like MotoGuzzi. Or we can buy Yamaha. So, there are alternatives there and we are not hurting ourselves."

TECH TAXES? 

Although the commission has been coy about whether it has U.S. Big Tech in its sights, France straight off the bat said the EU's targets could include American tech titans.

French government spokeswoman Sophie Primas said the EU could "attack" online services, "which are not taxed today but could be".

Economy Minister Robert Habeck echoed Primas, insisting "everything is on the table".

The United States had a surplus of $120 billion in services in 2023 with the EU. U.S. companies dominate in financial services including banks and card payment systems like Mastercard, and tech such as Amazon, Google, Meta and Microsoft.

"If they're going to go after our goods surplus, then we'll look at the services surplus," an EU official said. 

Financial services could also be targeted, not just big tech, the official said.

"We're currently discussing it, and in such cases, the response must be made public as soon as it's decided," French Finance Minister Eric Lombard said on Friday. "It's a signal to our American friends. But we're working on a package of responses that could go well beyond tariffs."

TRADE TOOLS

An EU official refused to say what weapons Brussels would deploy against the United States but said the bloc is weighing whether to use the anti-coercion instrument.

First adopted in 2023 but never used, the weapon punishes any country using economic threats to exert pressure on the EU. It could help the EU with the United States.

And with this tool, the commission can act without the support of all EU states.

It would allow the EU to limit U.S. companies' access to public procurement contracts in Europe, which France's Primas has already raised as a stick against Trump.

Officials believe targeting U.S. firms with EU rules and taxation would not risk higher prices for the continent's consumers.

"We are prepared to implement firm, impactful but proportionate countermeasures," EU trade chief Maros Sefcovic said on Thursday.

The EU has so far maintained a unified stance against Trump's tariffs. 

"Europe has everything it needs to make it through this storm. We are in this together," EU chief Ursula von der Leyen said.