EU chief warns of strong response to US tariff hikes

European Commission President Ursula von der Leyen on Tuesday issued a stern warning to the US over its escalating trade tariffs.

"We do not necessarily want to retaliate, but we have a strong plan to retaliate if necessary," von der Leyen said at the European Parliament Plenary debate.

The US has announced a 25% hike in tariffs on steel, aluminum, cars, and car parts, with further duties expected on semiconductors, pharmaceuticals, and timber, she said, adding that another announcement is expected on Wednesday to introduce broad tariffs on a wide range of global goods.

Von der Leyen stressed that across-the-board tariffs would only worsen the situation by driving up costs, fueling inflation, and creating bureaucratic burdens for businesses on both sides of the Atlantic.

In response, the EU has developed a three-pillar strategy. First, it remains open to negotiations but will approach discussions from a position of strength, holding firm on its economic leverage. If needed, Europe is ready to take strong countermeasures.

Second, the EU is diversifying its trade partnerships, expanding agreements with Mercosur, Mexico, and Switzerland, while negotiating deals with India, Indonesia, and Thailand.

Third, the EU will reinforce its Single Market by eliminating internal trade barriers, boosting business efficiency and economic growth.