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Workers at the Volkswagen AG factory in Wolfsburg, Germany. (Liesa Johannssen-Koppitz/Bloomberg News)

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The European Union is broadening the list of U.S. goods it will target with retaliatory tariffs if U.S. President Donald Trump follows through on his threat to impose duties on steel and aluminum exports, according to people familiar with the matter.

Bloomberg reported on Feb. 22 that the U.S. measures could impact as much as 28 billion euros ($29.3 billion) of European exports if derivative products are hit, which would be about four times larger than the last time Trump went after the bloc’s metals sector.

As part of his effort to rewrite global trade rules, Trump announced a series of duties including 25% tariffs on steel and aluminum exports that could take effect as soon as March 12. He also has announced reciprocal tariffs based on the policies of partners that are seen as obstacles to U.S. trade.

The list of U.S. goods targeted by the EU in response to Trump’s original measures is currently suspended until the end of March, but will automatically snap back if no action is taken. Adjusting that list will depend on the exact impact of Trump’s new measures and that is not yet known, said the people, who spoke on condition of anonymity.

I appreciate the genuine engagement with Secretary . Key to:
🔹reiterate how massive the 🇪🇺🇺🇸 partnership is
🔹have a better grasp of the underlying issues the U.S. wants to address
🔹how we can move forward by fostering mutual benefits.

👉 — Maroš Šefčovič🇪🇺 (@MarosSefcovic)

In expanding the lists of U.S. targets, the EU is assessing the impact on the U.S., the bloc’s alternative sources of supply and the effect the levies will have across member states, according to the people. Any potential response would need to also be proportionate to the U.S. measures and compliant with World Trade Organization rules.

The EU’s trade chief, Maros Sefcovic, debriefed the bloc’s ambassadors Feb. 21 after his visit to Washington to meet with his U.S. counterparts. He cautioned that the situation is in flux and the details and the scope of any tariffs could still change, said the people.

Sefcovic — who met with U.S. Commerce Secretary Howard Lutnick, Jamieson Greer, Trump’s pick for U.S. trade representative and National Economic Council Director Kevin Hassett last week — told EU envoys that the atmosphere was positive but no negotiations were conducted and the EU doesn’t have full clarity on Trump’s intentions yet, the people said.

In order to avoid a trade clash, Sefcovic offered to his American counterparts a deal to lower tariffs on industrial goods, including cars, one of Trump’s long-standing demands, according to the people.

Any move to lower tariffs on cars would need to be part of a broader mini trade deal that covers other sectors in order to comply with WTO rules that would otherwise see the bloc have to provide equal treatment to other nations, the people said. Separately, the U.S. is seeking long-term liquefied natural gas contracts. Trump has also set his sights on Europe’s digital taxes and value-added tax.

For the EU, the fight over American metals tariffs started in 2018 during Trump’s first term, when the U.S. hit nearly $7 billion of European steel and aluminum exports with duties, citing national security concerns. At the time, officials in Brussels scoffed at the notion that the EU posed such a threat.

In that first salvo, the U.S. hit steel goods with 25% tariffs and aluminum with 10%, and included exemptions for certain products. Bloomberg reported earlier that this time around, no exemptions were planned.

The 27-nation bloc reacted by targeting politically sensitive companies with retaliatory duties, including Harley-Davidson Inc. motorcycles and Levi Strauss & Co. jeans. The measures were applied product-by-product and included agricultural goods and apparel in addition to steel and aluminum products.

The two sides agreed to a temporary truce in 2021 with Joe Biden’s administration, when the U.S. partly removed its measures and introduced a set of tariff-rate quotas above which duties on the metals are applied, while the EU froze all of its restrictive measures.