EU Plans to Demand Quotas and Elimination of Tariffs on Automobiles and Steel

Targeting Tariff Reductions on Pharmaceuticals, Alcohol, and Semiconductors

Seeking Strategic Purchases from the US in LNG and AI Technology Sectors

Includes Retaliatory Tariffs if Trump Halts Talks

The European Union (EU) is reported to be planning to request quotas and exemptions from the United States to effectively lower the 25% tariff on automobiles and auto parts, as well as the 50% tariff on steel and aluminum. At the same time, the EU is willing to accept a comprehensive 10% tariff while planning to reduce tariffs on key sectors such as pharmaceuticals, alcohol, semiconductors, and commercial aircraft.

On the 1st (local time), Bloomberg, citing sources, reported that the European Commission of the EU is preparing such a negotiation proposal.

The EU also plans to focus on dismantling non-tariff barriers and suggests seeking strategic purchases in various sectors, including liquefied natural gas (LNG) and artificial intelligence technology. Additionally, the EU is open to cooperating with the US on joint economic security challenges.

The EU estimates that the tariffs currently imposed by the US amount to EUR 380 billion (about ₩607.47 trillion), equivalent to approximately 70% of EU exports to the US.

EU officials suggested four possible scenarios ahead of next week's deadline: a deal with an acceptable level of asymmetry, an imbalanced proposal unacceptable to the EU, an extension of the deadline to continue negotiations, and Trump cutting off talks and raising tariffs on the EU.

Sources said that in the last scenario, the EU is most likely to mobilize all options for retaliation. In parallel with negotiations, the EU continues to prepare countermeasures in case the results of the talks are not satisfactory.

According to data collected by analysts from the EU and ING, in 2024, the EU exported EUR 52.8 billion (about ₩71.47 trillion) worth of automobiles and auto parts to its top export destination, the United States. Data from the Vienna Institute for International Economic Studies (VIIES) shows that the EU exported EUR 24 billion (about ₩32.49 trillion) in steel and aluminum to the US.

EU Trade Representative Maroš Šefčovič is leading a delegation in negotiations in Washington, D.C. this week.

In response to President Trump’s tariffs on steel and aluminum, the EU approved tariffs on USD 21 billion (about ₩33.56 trillion) worth of US products. These tariffs target politically sensitive US states and include agricultural products such as soybeans from Louisiana, the home state of House Speaker Mike Johnson, as well as poultry and motorcycles.

In response to Trump’s so-called reciprocal and auto tariffs, the EU has prepared an additional tariff list covering USD 95 billion (about ₩152 trillion) worth of US products. The list includes Boeing aircraft, US-made automobiles, bourbon whiskey, and other industrial products. The EU is also working to identify strategic sectors that the US relies on from the EU and is seeking potential measures such as export controls and restrictions on procurement contracts.

Jung-Ah Kim, contributing reporter kja@hankyung.com