BRUSSELS, Feb 10 (Reuters) - U.S. President Donald Trump

has said he will impose tariffs on imports of steel and

aluminium and raise rates to match those of other countries in

the coming week.

The United States and European Union have the world's

largest commercial relationship, trading 1.5 trillion euros

($1.55 trillion) of goods and services in 2023.

European Commission president Ursula von der Leyen said last

week the EU would "respond firmly" if targeted unfairly or

arbitrarily. Here is the EU's possible course of action.

RETALIATORY TARIFFS

In 2018, after Trump imposed tariffs on 6.4 billion euros of

EU steel and aluminium imports, the EU hit back with its own

duties on 2.8 billion euros of U.S. products. Tariffs on a

further 3.6 billion euros of U.S. imports were due to take

effect three years later, but were not imposed after Joe Biden

became U.S. president and the two sides agreed a truce.

The EU tariffs targeted U.S. steel and aluminium, but also

products concentrated in states that had voted for Trump, such

as bourbon whiskey from Kentucky, motorcycles from

Wisconsin-based Harley Davidson ( HOG ) and orange juice from Florida.

The EU could adopt a similar strategy of "rebalancing"

measures this time as well, although Washington has more to

target than Brussels. U.S. goods imports into the EU totalled

347 billion euros in 2023, against 503 billion euros of exports,

according to EU statistics agency Eurostat.

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 United States 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 ( AMZN ), Microsoft, Netflix ( NFLX ) or

Uber ( UBER ).

The EU can also restrict protection of intellectual property

rights, limit financial service companies' access to EU markets

and curb companies' ability to place chemicals and agri-food

products in the EU.

The ACI was proposed in 2021 as a response to EU member

criticism that the first Trump administration and China used

trade as a political tool. China had targeted Lithuania,

according to Lithuania officials, after it allowed Taiwan to set

up a de facto embassy in Vilnius.

The law gives the Commission up to four months to examine

possible cases of coercion and to propose courses of action to

EU members, which have about another two months to approve them.

The Commission can pause any measures for six months as it seeks

to find a diplomatic solution.

BIG TECH

Beyond formal trade policy, the European Union has a number

of routes to curb the activities of large U.S. tech firms, many

of whose CEOs had prime seats at Trump's inauguration.

The EU has ongoing investigations against Apple ( AAPL ),

Alphabet, X and Meta under its Digital

Markets Act (DMA), which imposes antitrust obligations, and the

Digital Services Act (DSA), which covers content moderation.

It is also likely to add Amazon ( AMZN ) to the list, Reuters has

reported.

The DMA foresees fines of up to 10% of global turnover or

20% for repeat offences. For the DSA, the maximum fine is 6% of

turnover.

Meta Chief Mark Zuckerberg has called on Trump to stop the

EU from fining U.S. tech firms. Trump ally Elon Musk has

repeatedly clashed with EU regulators.

Another avenue is to tax digital service providers. The EU

suspended work on a Digital Services Tax to allow a broader

solution to be found at the Organisation for Economic

Cooperation and Development (OECD), which published a draft

multilateral treaty in 2023 that has yet to be finalised.

A number of EU countries, such as France, do have digital

services taxes. Trump in his first term responded with tariffs,

which were then suspended by Biden.

($1 = 0.9695 euros)