U.S. President Donald Trump signed an executive order on Wednesday imposing a 20 percent tariff on the European Union.

European Commission President Ursula von der Leyen said Thursday morning that the U.S. tariffs are a major blow to the global economy and pledged countermeasures.

"I spoke with Ursula von der Leyen about this last weekend, and I know the Commission is assessing all of the United States' actions, as are likely all other countries. The Commission's and Europe's first preference, just like Estonia's, is to begin with dialogue. In trade tensions and tariff wars, there are really no winners," Prime Minister Kristen Michal said at a government press conference.

"Basic economic logic still points to the fact that open trade — trade without barriers — often creates new prosperity for the world. So this is certainly not a good situation. But if there is to be a response, then the European Union must respond together," Michal added.

According to Michal, the first step in the EU's response will be a package of countermeasures targeting U.S. agricultural and industrial products — a move also supported by the Estonian government on Thursday.

"This is a response to the U.S. tariffs on aluminum and steel," he said.

Michal noted that the 20 percent tariffs announced on Wednesday are clearly unwelcome news, though not unexpected.

"Everyone more or less knew this was coming. The European Union will certainly assess the economic impact — on which product groups, on which countries — and take responsive measures. As the EU, we definitely have very effective levers to influence this," Michal emphasized.

"But again, the first step should be a proper analysis, followed by a possible dialogue on the issue and only then countermeasures," he added.

"Christine Lagarde, and also the Bank of Estonia, have said that the impact of this tariff policy on European economic growth will be 0.3 percent from the U.S. side and 0.5 percent altogether after countermeasures. It could cool economic growth — thankfully not stop it — but we need to evaluate exactly which product groups and which parties are affected. And those countermeasures must be carefully considered as well. There will definitely be an impact on economic activity. Personally, I believe that free trade is certainly one of the main drivers of global prosperity. In my view, no one wins in a tariff war — but we will deal with it," Michal said.

ERR asked Michal to clarify whether he believes the European Union should avoid countermeasures if possible.

"No. We confirmed the countermeasures. I spoke with Leyen, the European Union is evaluating the steps, then the countermeasures will follow and then we will act," the prime minister responded.

"Trade policy is an exclusive competence of the European Union. The European Commission is preparing the countermeasures and they are coming — from trade to services," Michal added.

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