The head of the European Parliament's trade committee called new U.S. tariffs on EU goods "unacceptable" - a direct response to a fresh tariff proposal Washington floated this week.
The message is aimed at the Trump administration, after the U.S. Trade Representative's office on Tuesday proposed additional duties of 10% or 12.5% on imports from 60 economies, including the EU, over alleged failures to curb trade in goods made with forced labor.
Bernd Lange, who chairs Parliament's trade committee, said anything stacked on top of the rates agreed under last summer's Turnberry deal - which capped most EU goods at 15% - is a line Brussels won't accept.
The Trade Relationship At Stake
The U.S. and EU run the largest bilateral trade relationship in the world, with roughly $1.5 trillion in goods and services crossing the Atlantic each year.
Cars, machinery, wine, pharmaceuticals, and luxury goods move in huge volumes between the two blocs, with Germany alone shipping about $160 billion in goods to the U.S. last year.
Within that flow, the EU runs a goods trade surplus with the U.S., which is part of what has drawn Trump's attention - he has repeatedly singled out European autos as a target for new duties.
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The Stocks Most Exposed
European automakers, luxury houses, and farm exporters all sell heavily into the U.S., meaning tariffs would squeeze margins on every car, handbag, and bottle of wine moving westward.
American companies aren't safe either, since the EU has a long history of matching tariffs with tariffs - last round, that meant levies on bourbon, motorcycles, and jeans hitting names like Harley-Davidson and Brown-Forman directly.
Beyond those direct hits, stocks tied to global trade tend to move first when these fights start brewing, with auto suppliers and industrial names often selling off before any policy actually takes effect.
The EU's Retaliation Playbook
The EU has done this dance before, retaliating against U.S. steel and aluminum tariffs in 2018 with about €2.8 billion (roughly $3.3 billion) in counter-duties on American goods.
Those measures targeted politically sensitive products from key Republican states, which is the same playbook Brussels is likely to dust off if new duties land.
What To Watch
The USTR proposal still has to go through public consultation and review, so nothing is locked in yet - but if Washington pushes forward, expect Brussels to fire back fast.
Watch for the final shape of the additional duties and the EU's response - the 2018 pattern suggests retaliation often comes within weeks, not months.
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