A Bloomberg report published on Monday stated that the European Union is intensifying its diplomatic efforts with countries impacted by US tariff escalations, including Canada and Japan, amid Donald Trump's renewed threats to impose sweeping trade restrictions. EU officials are exploring options for coordinated responses as negotiations with Washington stall, especially over contentious issues like car duties and agricultural tariffs.

Teresa Ribera, the EU's competition chief, speaking from Beijing, underscored the bloc's simultaneous pivot toward the Asia-Pacific region, noting that finalizing a free trade agreement with India by year's end remains a key objective.

"We need to explore how far, how deep we can go in the Pacific area with other countries," she told Bloomberg TV, suggesting an expanded trade framework that could serve as a hedge against US unpredictability.

European Commission President Ursula von der Leyen confirmed that the EU will prolong its suspension of countermeasures against the US until August 1, allowing space for negotiations. However, she added that preparations for retaliatory action are well underway: the EU has a €21 billion ($24.5 billion) tariff list in place, with an additional €72 billion package and export controls under review.

"At the same time, we will continue to prepare further countermeasures so we are fully prepared," she said in Brussels.

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Escalation, unity, and retaliation

While von der Leyen stated that the bloc's Anti-Coercion Instrument (ACI), a legal tool designed to deter economic blackmail, is not currently being employed, French President Emmanuel Macron pushed for its immediate readiness. Calling the Trump tariffs a "direct threat," Macron used social media to advocate for speeding up "credible countermeasures," including ACI activation.

According to Bloomberg, Germany's Chancellor Friedrich Merz issued a more somber warning in a televised interview, stating that proposed 30% tariffs on EU exports could "hit exporters in Europe's largest economy to the core." He urged unity among EU member states and continued communication with the US administration to avoid severe fallout.

Canada, which also received a formal warning from Trump about looming 35% tariffs, has already imposed retaliatory tariffs on US steel, aluminum, and auto parts. It is also deepening trade ties in Asia and Latin America to diversify its export markets, reported Bloomberg, adding that Japan, similarly, is lobbying for exemptions while establishing a crisis task force to respond to potential trade disruption.

Read more: South Korea warns US chip tariffs threaten economy, global supply

Tariff standoff

According to Goldman Sachs analysts, the full implementation of Trump's new tariff regime could raise the effective US tariff rate on EU imports by 26 percentage points and shave 1.2% off euro area GDP by the end of 2026. They noted that while the aggressive measures may be part of a negotiating strategy, "the EU would likely retaliate… raising the risk of further trade escalation."

As the August 1 deadline looms, EU officials remain locked in discussions to secure favorable terms. But the scale and speed of Trump's proposed tariffs, including a 25% duty on automobiles and parts, 50% on copper and aluminum, and new levies on sectors like pharmaceuticals and semiconductors, have alarmed Brussels.

With alternative trade alliances being fortified and countermeasures already drafted, the EU is preparing for a scenario in which negotiation fails and a new phase of transatlantic economic confrontation begins.