Brussels — The European Union has issued a warning that it may impose tariffs on up to $84 billion worth of American goods if ongoing trade negotiations with the United States collapse.

The warning comes as part of the EU’s contingency planning in response to a possible breakdown in talks aimed at resolving long-standing disputes over subsidies, tariffs, and broader trade policies. Officials in Brussels say they are preparing for “all scenarios” should Washington fail to engage constructively.

The move escalates trade tensions between two of the world’s largest economies, as the EU seeks to protect its industries from what it describes as unfair US trade practices. Potential retaliatory tariffs could impact key American exports, including automobiles, agricultural products, and industrial goods.

The warning follows months of dialogue aimed at addressing disagreements related to the Inflation Reduction Act and subsidies that the EU argues give an unfair advantage to US-based companies.

European Commission officials emphasized that the EU remains committed to dialogue but must be ready to defend its economic interests if talks fail to produce results. The threat of tariffs is seen as a leverage tactic to push the US back to the negotiating table under fairer terms.

The US has yet to formally respond, but trade analysts warn that a failure to resolve the dispute could lead to a new round of transatlantic trade friction, with broader implications for the global economy.