EU Offers Zero-for-Zero Tariffs Deal to U.S. Amid Escalating Trade War Threat

Europe Pushes for De-escalation as U.S. Tariffs Hammer Markets

The European Union has proposed a “zero-for-zero” tariff deal to the United States in a last-minute bid to avoid a full-blown transatlantic trade war, European Commission President Ursula von der Leyen announced on April 8.

“We have offered zero-for-zero tariffs for industrial goods… Europe is always ready for a good deal,” said von der Leyen during a Monday speech.

The proposal comes as the U.S. imposes sweeping new tariffs — 25% on steel, aluminum, and cars, and 20% on nearly all other EU imports, affecting €380 billion in goods. The EU is expected to approve a first round of countermeasures worth up to $28 billion, with a broader package likely by end of April.

Markets Tank as Trump’s Tariffs Take Hold

The market response was immediate and brutal.

• 📉 European stocks saw their worst one-day drop since the COVID-19 crash.

• 🧊 Investors are rattled by fears of a global trade freeze, especially amid deteriorating U.S.–China relations.

EU Trade Commissioner Maros Sefcovic described recent negotiations with U.S. officials as "frank," saying the bloc clearly communicated that these tariffs are "harmful and unfair."

Brussels Warns of Retaliation, But Has Limited Leverage

Despite vows to respond, Brussels has fewer tools than Washington.

• EU imports from the U.S. totaled €334B in 2024

• EU exports to the U.S.: €532B

The imbalance leaves the U.S. in a stronger retaliatory position, and countries like France and Italy are especially vulnerable due to their wine and spirits industries, which Trump has threatened with 200% tariffs. Still, EU trade ministers are calling for restraint.

“We need to remain calm and respond in a way that de-escalates,” said Dutch Trade Minister Reinette Klever.

Asia Becomes Collateral Damage—and a New Risk for Europe

While China and Southeast Asia have been hardest hit by U.S. tariffs—Cambodia (49%), Vietnam (46%), India (26%), China (54%)—there’s growing concern in Brussels that Asian exports will now be redirected into Europe, further stressing EU industries. Von der Leyen announced the launch of an Import Surveillance Task Force to monitor for sudden surges in redirected trade.

“We will protect ourselves against indirect effects through trade diversion,” she said.

The fear is that cheap, subsidized goods from China and Southeast Asia could flood European markets as these exporters look for alternatives to the U.S. amid rising protectionism.