Leaders may first try to negotiate before imposing reciprocal tariffs, says Timothy Hellwig, an expert on European politics.

The European Union is dialing back the pace of its planned retaliation against U.S. steel and aluminum tariffs, a senior official said Thursday. The move comes after U.S. Treasury Secretary Scott Bessent warned trading partners might risk still higher levies if they retaliate.

A top European Union official warned the U.S. on Tuesday that the world's biggest trade bloc "holds a lot of cards" when it comes to dealing with the Trump administration's new tariffs and has a good plan to retaliate if forced to.

Alongside Wall Street, global stock markets took a beating after Trump unveiled a 10% baseline tax on all imports, as well as higher tariff rates for some major trade partners.

the head of the European Union’s executive, said in a speech. “We do not necessarily want to retaliate but, if it is necessary, we have a strong plan to retaliate and we will use it.”

European Commission President Ursula von der Leyen says the EU “holds a lot of cards” when it comes to dealing with the Trump administration’s new tariffs and has a good plan to retaliate if forced to.

Everyone knew tariffs were coming and everyone was left stunned by them all the same. US President Donald Trump’s announcements of the punishing levies ripped through markets and left governments around the world searching for answers.

On Wednesday, Trump dumped the European Union in the worst category of America’s trade partners, hitting the bloc with a 20 percent tariff on all imports. The U.S. president said the EU was “ripping off” the United States, adding it was “pathetic.”