**RETALIATORY TARIFFS**
The European Commission can propose retaliatory tariffs on goods, which can be blocked only by a qualified majority of 15 EU member states representing 65% of the EU population.
It has already outlined a two-stage planned response to the steel and aluminium tariffs. First, it says it will restore measures introduced in 2018 when Trump first imposed tariffs on imports of the metals, later suspended under Joe Biden. These countermeasures, including a 50% tariff on US bourbon, were due to come into force on Tuesday, but the Commission later delayed them until mid-April to allow more time to consider which US goods to hit.
Wine exporters France and Italy have expressed concern about taxing bourbon after Trump threatened to retaliate with 200% tariffs on European alcohol.
The Commission also drew up another list of US imports, including meat, dairy produce, wines and clothing, valued at 21 billion euros, which it planned to narrow down to 18 billion euros, for a second tranche of tariffs, originally due to be applied from mid-April.
The EU has not yet said what steps it would take in response to the automobile tariffs or the upcoming reciprocal levies.
**ANTI-COERCION INSTRUMENT**
The EU's Anti-Coercion Instrument (ACI), which came into force at the end of 2023, allows the bloc to retaliate against third countries that put economic pressure on EU members to change their policies, and offers far wider scope for action.
As well as imposing goods tariffs, the EU can limit access to public procurement tenders for companies from a third country or take action affecting services trade or investment.
While the US has a trade deficit with the EU in goods, it has a surplus in services trade, including digital services provided by the likes of Amazon, Microsoft, Netflix or Uber.