The European Commission says it has offered a "zero-for-zero" tariff deal to avert a trade war with US President Donald Trump as EU ministers agree to prioritise negotiations, while striking back with 25 per cent tariffs on some US imports.

The 27-nation bloc faces 25 per cent import tariffs on steel and aluminium and cars and broader tariffs of 20 per cent from Wednesday for almost all other goods under Trump's policy to hit countries he says impose high barriers to US imports.

On Monday evening, the Commission proposed its first retaliatory tariffs at 25 per cent on a range of US imports in response to Trump's steel and aluminium tariffs rather than the broader levies.

However, the list was shortened after the EU executive bowed to pressure from member states and removed bourbon, wine and dairy – after Trump threatened a 200 per cent counter-tariff on EU alcoholic drinks. France and Italy, major exporters of wine and spirits, were particularly concerned.

US tariffs hitting €380 billion worth of EU exports, says EU Trade Commissioner. – Reuters

EU trade chief Maros Sefcovic said earlier on Monday the retaliation would impact less than the previously announced €26 billion. The tariffs for most of the goods will go into effect May 16 and some from December 1.

Ministers overseeing trade met in Luxembourg on Monday to debate the EU's response and discuss relations with China. Many said the priority was to launch negotiations to remove Trump's tariffs, rather than fight them.

Michal Baranowski, deputy economy minister of Poland, told a press conference after the meeting that his EU counterparts did not want to be "trigger-happy".

Sefcovic said discussions with Washington were at an early stage and that he had offered "zero-for-zero" tariffs for cars and other industrial products, expressing hope that discussions could begin.

However, Trump's top trade adviser on Monday dismissed tech-billionaire Elon Musk's push for "zero tariffs" between the US and Europe, calling the Tesla CEO a "car assembler" reliant on parts from other countries.

"While the EU remains open to – and strongly prefers – negotiation, we will not wait endlessly," Sefcovic said.

He added the bloc would push ahead with countermeasures and steps to avoid floods of diverted imports.

The EU is set to approve the first retaliatory measures this week. The bloc will start collecting the tariffs on April 15, with a second tranche starting a month later.

The removal of bourbon from the list of items subject to the EU's retaliatory tariffs on US imports "would be great news, and we are hopeful this is the case", said Chris Swonger, chief executive of the Distilled Spirits Council of the United States.

"It would be the first step toward getting the US-EU spirits sectors back to zero-for-zero tariffs and untangling distilled spirits products from these wider trade disputes.”

EU wine and spirits are caught up in the trade war. – Reuters

EU keeps all retaliation options open

The bloc is expected to produce a larger package of countermeasures by the end of April, as a response to US car and broader tariffs.

Sefcovic said the EU was ready to consider all retaliatory options. One is the EU's Anti-Coercion Instrument (ACI), which allows it to target US services or to limit US companies' access to EU public procurement tenders.

"We are prepared to use every tool to protect (the) single market," he said, echoing the views of French Trade Minister Laurent Saint-Martin.

Saint-Martin said there should be no taboos, including the ACI, which would allow it to target US services or to limit US companies' access to public procurement tenders in the EU.

"We cannot exclude any options on goods or services and, however we approach it, open the box to the European tool which is very comprehensive and which can be extremely aggressive."

In a war of tariffs on goods, Brussels has less to target than Washington, given EU goods imports from the US totalled €334 billion in 2024, against €532 billion of EU exports to the US.

Some EU countries, particularly those exposed to trade with the United States, urged caution. Irish Foreign Minister Simon Harris described the Anti-Coercion Instrument as "very much the nuclear option".

Baranowski of Poland said EU members were willing to keep options open, with a stress on proportionality.

"There were various ideas put on the table. Some countries mentioned services. Others didn't. Some countries mentioned digital services, others didn't," he said.

Outgoing German Economy Minister Robert Habeck said the EU should realise it was in a strong position – if it was united.

"The stock markets are already collapsing and the damage could become even greater. America is in a position of weakness," he said in Luxembourg.

Von der Leyen: EU ready to negotiate on tariffs. – Reuters

Meanwhile, European Commission President Ursula von der Leyen held a call with metals industry representatives and was due to speak later to the automobile sector about how to respond to US tariffs.

The calls aimed to collect data for further counter-measures beyond Brussels' response to Washington's steel duties, which will be voted on later this week. A call with the European pharmaceuticals industry is also planned.

Major stock indexes and oil prices plummeted at the start of the week on fears that Trump's duties could push up prices, weaken demand and even trigger a global recession.

Von der Leyen's invitation said the EU would this year propose "a trade measure replacing the steel safeguards as of 1 July 2026" to protect against "negative trade-related effects caused by global overcapacities".

After the call, the Commission statement said the industry had "underlined the urgent need for the EU to propose new trade defence measures for steel – beyond the existing safeguards, which are due to expire in June 2026 – including to address potential deflection of exports".

The sector also expressed concern about the falling volume of aluminium and steel scrap for recycling. The Commission said last month it would consider export duties on EU scrap sales. It also tightened existing safeguards on steel to cut imports by 15 per cent on April 1.

"Constructive meeting ... Sense of urgency, clarity of purpose is much increased compared to a few months ago," a source who attended the call said.

Europe's No.2 steelmaker, Thyssenkrupp Steel Europe, said "binding minimum quotas of 'European content' in private and public procurement" were key to strengthening the EU market.

The auto industry group in Brussels, ACEA, has requested a negotiated solution, a spokesperson added. Carmakers have been pushing the EU to lower its tariffs on car imports from the US BMW in January urged a cut to 2.5 per cent from 10 per cent.

Their call with the Commission was set to include lobby groups as well as CEOs and chairs from BMW, Volkswagen, Stellantis, Scania, Daimler Truck and Bosch.

A plant of the German pharmaceutical and chemical maker Bayer. – Reuters

On pharmaceuticals, the Commission initially invited the chief executives of EU-headquartered companies for a meeting, three industry sources said.

A fourth source said the Commission may have later invited Swiss-based firms such as Novartis and Roche. Reuters was not immediately able to confirm this. Roche said it was an active member of EFPIA but declined to comment further.

The European pharma trade lobby EFPIA and the biotech lobby Europabio both said they were attending, as did the generics group Medicines for Europe.

Pharmaceuticals were exempt from the duties Trump announced last week, but he says they will face separate tariffs.

The industry will push the Commission to spell out how it plans to enable pharma and biotech firms to manufacture more in Europe, a source attending the meeting said.

They said that could include streamlining regulatory processes that have recently discouraged some companies from conducting clinical trials in Europe.