The trade tensions between the EU and the US are escalating again in the form of a 'legal battle.' On Thursday local time, the EU officially announced that it would file a lawsuit with the World Trade Organization (WTO) against the tariffs imposed by the US on EU cars and parts. This marks the entry of the dispute over car tariffs into the formal dispute resolution phase under the multilateral trade rules framework.
This is not just a traditional trade dispute concerning 'steel and automobiles'; it also reflects the complex interests entangled in transatlantic relations, the vulnerabilities of global supply chains, and the 'sense of failure' of international trade rules in the current great power competition.
1. 'Openly Violating' International Rules? The EU Activates WTO Dispute Resolution Mechanism
According to a statement from the European Commission, the EU has officially requested consultations with the US through the WTO dispute resolution mechanism, accusing US tariffs of 'clearly violating international trade rules.'
The EU explicitly stated in its announcement: 'This is the EU's firm position: US tariffs openly violate the fundamental rules of the WTO. Therefore, the EU's goal is to reaffirm the authority of multilateral trade agreements; no WTO member can unilaterally undermine these rules, including the US.'
In other words, the EU is not merely seeking 'justice' for its automotive industry but aims to 'defend' the multilateralism and rule of law of the international trade system.
2. Trump-style Tariff Policy: Angering the EU, Triggering a 'Chain Reaction'
The catalyst for this dispute was the Trump administration's threat to impose a 25% tariff on EU imported cars. Trump had publicly stated that imported cars 'threaten US national security,' providing a legal basis for the tariffs, but this was seen by the EU as an 'absurd excuse.'
EU Trade Commissioner Maroš Šefčovič emphasized at a press conference that the EU hopes to resolve the dispute through negotiations but is prepared for 'all possible scenarios.'
Behind this statement is the EU's readiness with a 'countermeasure list.' It is reported that the EU is publicly seeking opinions to draft a countermeasure list against US products, with a total value of €95 billion (approximately $107.4 billion). This list is 200 pages long and involves over 4,800 types of US products, including passenger cars, medical devices, chemicals, plastics, and agricultural products.
It is noteworthy that American spirits such as Bourbon whiskey have been re-included in the list. This is not coincidental. According to media reports, France and Italy had previously lobbied to exclude it due to concerns about the impact on their wine exports, but ultimately it was re-included under political pressure. This reflects the subtle balance of 'strategic concessions' within the EU.
3. Diversification of Counterattack Tools: From Tariffs to Non-Tariff Barriers
In addition to tariff countermeasures, the EU is also considering non-tariff barriers as a 'hidden weapon.' It is reported that the EU is weighing restrictions on imports of US scrap steel and specific chemicals, a measure that could impact trade worth approximately €4.4 billion ($5 billion).
This means that if negotiations break down, the EU has the capability to exert pressure on the US through a series of 'soft and hard' measures. This 'composite counterattack' also reflects the transition of international trade disputes from singular tariff barriers to a more complex and systematic 'industrial chain strategy.'
4. von der Leyen: Diplomacy is Still the First Choice, but the Bottom Line Has Been Drawn
European Commission President von der Leyen emphasized in a statement: 'The EU is ready to reach an agreement with the US. This not only serves the interests of businesses and consumers on both sides of the Atlantic but also aligns with the interests of the international economic order.'
This statement reveals a dual intention: on one hand, the EU does not want a full-blown trade war; on the other hand, it indicates that 'if a counterattack is necessary, it will not hold back.'
It is worth mentioning that while the EU initiates WTO litigation against the US, it has also approved 'critical concessions' for the local automotive industry: by relaxing emission regulations, it provides manufacturers with more flexible paths to meet emission standards. According to the new regulations, from 2025 to 2027, automakers can calculate emissions based on a three-year average rather than requiring annual compliance, thus giving companies more transitional space.
This reform received overwhelming support from the European Parliament with 458 votes to 101. The European Automobile Manufacturers Association (ACEA) also issued a statement saying that this change 'provides the much-needed flexibility for the transition to zero emissions.'
5. The 'Industrial Moat' Logic Behind the Trade War
This seemingly targeted dispute over 'automobile tariffs' is, in fact, a deeper contest of 'industrial moats.' The US hopes to force European car manufacturers to increase investment in the US and establish local production lines through high tariffs; meanwhile, the EU aims to protect the European automotive supply chain and prevent key links from being 'outsourced' or 'hollowed out.'
This is also why the EU exhibits a tough stance at the 'negotiating table' while quietly loosening regulations for local manufacturing to maintain its 'last mile' under international pressure.
6. Future Impact: Not Just Cars and Steel, But the Entire Supply Chain
This dispute is not just a bilateral issue of 'the EU against the US'; it is also another 'stress test' for the global supply chain and international trade system.
According to data from Eurostat, EU imports from the US are projected to reach $123 billion in 2024, with aircraft and automobiles being the largest commodities. If the EU implements countermeasures against the US, it will not only impact the automotive industry but may also affect Boeing, agricultural products, medical devices, and several other sectors.
This uncertainty could become a new risk factor for the global market. Particularly against the backdrop of a strong dollar, tightening Federal Reserve policies, and the global supply chain still not fully repaired, any escalation of the trade war could trigger a chain reaction in risk asset prices.
Conclusion: The Legal Battle is Just the Prelude; The Real Contest is Beyond the Negotiating Table
The EU's WTO lawsuit against the US involves many 'behind-the-scenes chips.' It is both a legal response to Trump's 'tariff card' and a tactical deployment to increase leverage in negotiations. Whether it can be resolved through negotiation ultimately depends on the strategic, interest, and political considerations of both sides.
For the market, this serves as a reminder: when 'international rules' are repeatedly challenged, the risks faced by traditional financial assets may require 'non-traditional assets' for hedging.
In this macro context, using AI research tools like Mlion.ai to track policy changes, international trade data, and on-chain sentiment trends in real time may help investors detect 'signals of risk' earlier and find 'safety margins' in complex situations.
Disclaimer: The above content is for information sharing only and does not constitute any investment advice! Investment carries risks; enter the market with caution.
