US tariffs on European goods jumped to 20 percent on Wednesday, hitting everything from French wine to German cars. Brussels is firing back with its own measures, opening a wider trade fight that could hit key industries in France and across Europe.
President Donald Trump imposed a 10 percent tariff on all imports to the US on Saturday. That base rate is now being reinforced with additional surcharges aimed at countries that export more to the US than they import.
A document released by the White House shows that around 80 countries and territories are affected. China faces a 104 percent hike, Vietnam 46 percent and Japan 24 percent. China's ministry of finance retaliated on Wednesday afternoon saying it will impose 84 percent tariffs on US goods from Thursday, up from the 34 percent.
The 20 percent surcharge on EU goods applies across the board, covering all exports from France and other member states.
'Major risk to France'
French Prime Minister François Bayrou warned the tariffs could cost France more than 0.5 percent of GDP.
“The risk of job losses is absolutely major, as is that of an economic slowdown and a halt to investments,” he told daily Le Parisien.
French exports most exposed to the new US measures include aerospace, which brought in €9.3 billion between February 2024 and January 2025, and wine and spirits, valued at €4.1 billion.
French consumers are tipped to feel the impact in the form of higher prices on some everyday goods. As US companies pass on the costs of tariffs, items made with imported materials – such as electronics, clothing and household products – could become more expensive.
At the same time, French producers facing US tariffs may scale back exports, raising the risk of surplus stock and domestic price drops in sectors like wine or cheese.
“If we look at the volume and value of French exports to the US by sector, it's clear the most affected will be aerospace, agri-food, cheese, wine and spirits, luxury and, to some extent, cars,” Vincent Chaigneau, head of research at asset manager Generali Investments, told Le Parisien.
Markets have reacted sharply to the tariff spat. The Paris Bourse closed down 4.68 percent on Monday before clawing back some ground on Tuesday.
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EU counter-measures
The EU is now voting on the first wave of counter-measures. The bloc plans to impose tariffs of up to 25 percent on American goods worth €22.1 billion, based on 2024 import figures. The first set will come into effect on 15 April, with a second on 16 May and a third on 1 December.
The EU’s target list includes poultry, orange juice, rice, tobacco, soybeans, steel, luxury yachts, motorcycles, clothing, diamonds and makeup. France, Ireland and Italy pushed to exclude Kentucky bourbon, fearing US retaliation.
Only Hungary has said it will vote against the plan.
While the EU measures match the US tariff rate, they cover fewer goods. US tariffs currently apply to €26 billion in European steel and aluminium exports alone.
European Commission President Ursula von der Leyen said the EU aims to “minimise the consequences for their economies” while sticking to World Trade Organisation rules. In contrast, the US has bypassed WTO consultation periods.
Multi-phase response
The commission is preparing a second phase of its response, expected by the end of the month. It may include tariffs on US services, especially in digital and financial sectors where the US runs a trade surplus.
Other tools under discussion include restricting access to EU public contracts, limiting certain American investments, and applying European regulations to tech giants like Meta, Apple and X, which are under investigation.
Brussels is also considering concessions that could help ease tensions, such as more purchases of US liquefied natural gas or lifting specific tariffs. But it has ruled out removing value-added tax on American goods, a US demand.
Von der Leyen has held talks with industry representatives. In a statement reported on Tuesday, the pharmaceutical lobby EFPIA warned that “with the uncertainty created by the threat of tariffs, there is little incentive to invest in the EU and significant drivers to relocate to the US”.
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Wider global trade shift
EU officials are also looking at the longer-term shift in global trade ties. A senior EU official reportedly said: “Since the US represents 13 percent of global trade, we need to organise with the remaining 87 percent.”
Von der Leyen is travelling to India, Uzbekistan and other countries in search of new trade deals.
The stalled Mercosur agreement is also back on the table. Austria now supports it, and France may be forced to soften its opposition under pressure from Germany and the incoming chancellor, Friedrich Merz.
China’s role is another concern. With American markets closing, EU officials fear Chinese overproduction could shift towards Europe.
After a call with Chinese Premier Li Qiang on Tuesday, von der Leyen said Europe and China have a “responsibility to support a strong reformed trading system, free, fair and founded on a level playing field”.
