EU leaders scramble to counter Trump’s trade war with retaliatory tariffs and divestments

Policymakers and politicians worldwide are reeling in the wake of US President Trump’s sweeping tariffs, while global F&B industry stakeholders brace themselves for the hard-hitting realities of this new trade war with the US.

Many are calling for diplomacy and a measured response as the world is plunged into trade chaos following Trump’s tariff announcement. On the other hand, some stakeholders and politicians want firm retaliatory action as they navigate the changes on a range of goods, including those targeting agri-food. 

Yesterday, UK Prime Minister Keir Starmer drew up a list of retaliatory tariffs to be imposed on US products while European politicians discussed how to respond. 

European Commission President Ursula von der Leyen confirmed that the bloc is now preparing for “further countermeasures” and warned that millions of people will face higher grocery bills.

Meanwhile, global stocks have sunk. 

Spain to suffer

Spain’s prime minister, Pedro Sánchez, proposed a €14.1 billion (US$15.6 billion) package to support the country’s economy in the face of the US. He slammed Trump’s decision as a return to “19th-century protectionism.” 

Spain stands to suffer losses of up to €4.3 billion (US$4.7 billion) as a result of the levies throughout 2025, with the country’s agri-food industry predicted to be the worst hit. 

Spain’s olive oil sector is bracing for difficulties. Its exports to the US are worth around €1 billion (US$1.1 billion), and exports of this domestic mainstay are expected to sharply decline. 

Spain’s wine sector raises concerns over tariff increases. Marzia Varvaglione, EU’s Comité Européen des Entreprises Vins (CEEV) president, says the US wine market is fundamental for the economic sustainability of the EU wine sector, and there is no alternative wine market that could compensate for its loss.

Meanwhile, French President Emmanuel Macron is in talks with representatives from the French wine sector and agriculture. He also calls on EU companies to freeze investments in the US until further clarification on tariffs. Germany is also pushing for a robust response. 

Brewers battered by tariffs

The Brewers of Europe say the US announcement of 20% reciprocal tariffs on all EU products will create losers on both sides, across society and the economy. However, the addition of beer to Annex 1 on aluminum derivative products facing a 25% tariff is particularly concerning to Europe’s ten thousand breweries. 

“The US is European brewers’ second most important export market for beer in both value and volume terms. We are currently seeking further clarity on the exact products captured by this new announcement,” says the Brussels-based organization. 

“Brewing is a key driver of growth, investment, and employment on both sides of the Atlantic and a major part of people’s lives on both continents. With value chains that stretch from the farmers grafting in the fields to the hardworking staff in the bars, it is critical to de-escalate and work toward a solution that cuts tariffs on beer and thus benefits consumers, workers, and businesses in both the EU and the US.” 

According to the World Bank, in 2023, the EU exported approximately US$822 million worth of beer to the US — accounting for about 21% of the EU's total beer exports. 

Trump has declared that all world nations will be subject to a baseline 10% tariff on all exports to the US from April 5 and a list of reciprocal tariffs against 60 of the “worst offender” countries that currently levy US imports.

Trade between Europe and the US is thrown into chaos following President Trump's tariff announcements.

Dire consequences for businesses and consumers

EU farming organization Copa and Cogeca expresses deep concern over the tariff announcements, claiming it will lead to an escalation in trade tensions between two key trading partners (EU and US), which threaten to undermine a sector that relies on stability and open and predictable markets.

It says the introduction of additional tariffs threatens to disrupt global supply chains, drive up prices, and limit market access for farmers and agri-cooperatives on both sides of theAtlantic, with significant economic consequences for the agricultural sector.

“European farmers and agri-cooperatives are already facing mounting challenges, from rising production costs to climate-related pressures. These new tariffs will add to further uncertainty and financial strain on our sector, affecting both producers and consumers,” says Copa president Massimiliano Giansanti.

“Ensuring our food security must be Europe’s compass in these difficult times, as our common national security starts there. We urge policymakers on both sides to seek dialogue and avoid a full-scale trade conflict.”

Cogeca president Lennart Nilsson adds that retaliatory trade measures will not benefit farmers in either the EU or the US but will “limit our opportunities, raise prices, and weaken the resilience of agricultural businesses.”

“We call on both administrations to prioritize negotiations and explore all diplomatic avenues before resorting to measures that could have long-lasting consequences.” 

Trade at a turning point

Tariffs for China are set for (54%), Vietnam (46%), the EU (20%), the UK (10%), Thailand (36%), Japan (24%), Cambodia (49%), South Africa (30%), and Taiwan (32%). 

“Europe’s food and drink industry deeply regrets the US’ decision to impose 20% tariffs on imports from the EU, given the impact it will have on transatlantic trade, businesses, and consumers,” says a statement from FoodDrinkEurope.

“The EU food and drink industry is a major driver of growth, employment, and innovation, with significant investments from EU and US companies in both regions. The two-way trade in agri-food raw materials, ingredients, and finished products underscores the critical importance of this relationship, one that ensures supply chain resilience.” 

“We reiterate our call for the de-escalation of trade tensions and welcome the EU’s desire to reach a negotiated outcome. It is essential that both sides prioritize constructive dialogue to find solutions that safeguard the integrity of our long-standing and mutually beneficial transatlantic trade relationship.”