European Commission president says EU has "strong plan" against new US tariffs

The tone from Brussels was defiant on Tuesday: in a speech addressing the European Parliament, European Commission president Ursula von der Leyen vowed that the EU did not "want to retaliate, but if it is necessary, we have a strong plan to retaliate and we will use it."

US president Donald Trump announced a sweeping new tariff plan on imported goods from around the world on Monday, referring to Wednesday, the day for which the tariffs' roll-out is expected, as "Liberation Day" for American consumers.

European Commission president Ursula von der Leyen insisted that the EU continued to seek a "negotiated solution" but highlighted that the economic bloc also held "many cards" and would not shy away from stepping up its retaliatory measures.

Repercussions for the US economy

While Trump said that the tariffs on imported products from other countries would free the US from relying on foreign goods, the announcement has dampened the confidence of major banks in the US' economic outlook.

Goldman Sachs notably raised the probability of a US recession to 35 percent, up from previously 20 percent.

Von der Leyen said that the tariffs would also fuel inflation in the US and that they "will create a bureaucratic monster of new customs procedures."

It is still unclear how exactly the new tariffs would be implemented and the EU has announced wanting to assess their impact before taking retaliatory measures.

These could see tariffs imposed on US steel and aluminium, but also on textiles, home appliances and farm goods.

Following the escalatory rhetoric from Washington, the EU could however now step up its measures beyond a tit-for-tat response and target US services in the tech and financial industries.

"All instruments are on the table", said von der Leyen.