EU Considers Targeting U.S. Services in Trade Dispute

Iruni Kalupahana, JadeTimes Staff

I. Kalupahana is a Jadetimes news reporter covering Europe

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Image Source: Samuel Corum

European officials are mulling over using a strong trade tool to retaliate against escalating tariffs imposed by the United States. Diplomatic discussions have centered on the possibility of limiting U.S. services, ranging from Big Tech and Wall Street offerings, in retaliation for President Trump's tariffs on European exports like aluminum, steel, and automobiles.

European Commission President Ursula von der Leyen has emphasized the willingness of the EU to "push back." This follows the EU's imposition of retaliatory tariffs on American goods, similar to previous trade conflicts.

In response to the latest U.S. tariffs, the EU is considering employing the anti-coercion instrument, a policy tool to counter economic coercion. The instrument, initially intended to be employed against China, could be employed against U.S. financial and tech sectors.

Early proposals involve limiting U.S. banks' access to the EU's public procurement market valued at approximately €2 trillion annually. The steps are also being considered to address the €300 billion annual European investment in U.S. firms and add more regulatory pressure on U.S. digital platforms.

Fabrizio Pagani, an investment bank partner and former Italian economic official, suggests using the anti-coercion tool as a threat to facilitate negotiations. European Commission spokesman Olof Gill confirmed the instrument's consideration, citing the EU's €110 billion trade deficit in services with the U.S.

But analysts and economists worry that such drastic steps would exacerbate the trade war. Panmure Liberum head of strategy Joachim Klement cautions that tariffs on services would immediately harm consumers and businesses and could deepen economic uncertainty.