The European Union has vowed to take decisive action in response to US President Donald Trump’s latest tariffs by imposing a series of retaliatory measures aimed at shielding European industries, workers and consumers from escalating trade tensions.
The new set of tariffs on steel and aluminium, implemented on 12th March by the Trump administration, came as a surprise to no one. The US President had been threatening to impose such levies since the beginning of his tenure and has a history of doing likewise dating back to his first term in office.
Back in June 2018, the US implemented Section 232 tariffs on European steel and aluminium exports, affecting an estimated €6.4 billion worth of EU goods, equivalent to approximately €8 billion in today’s trade values. Further restrictions followed in January 2020, targeting an additional €40 million worth of EU steel and aluminium derivative products. In response, the EU imposed retaliatory tariffs, known as rebalancing measures, to counteract the impact on European industries. However, all measures were eventually withdrawn after the US “agreed to suspend its 232 tariffs on EU exporters within a certain quota,” according to the European Commission.
NEW US TARIFFS
President Trump’s latest round of tariffs is three-pronged. First, he has, as of 12th March, reinstated the original 2018 Section 232 tariffs on various semi-finished and finished steel and aluminium products. Second, tariffs on aluminium have been raised from 10% to 25%. The third and most expansive change extends tariffs to additional products, including steel and aluminium household items that contain the metals.
Further compounding the issue, the US Secretary of Commerce is expected to establish a mechanism by 12th May that would enable the continuous expansion of the list of products, potentially imposing duties of up to 25% on other European goods.
According to the European Commission, these new measures impact €26 billion worth of EU exports, representing approximately 5% of the bloc’s total goods exports to the US.
“Based on current import flows, this will result in US importers having to pay up to €6 billion in additional import tariffs,” reads a statement from the EC press office.
Meanwhile, Ursula von der Leyen, the President of the EC, has called the 25% US levies on global imports of the metals “unjustified trade restrictions.”
“We deeply regret this measure,” she shared via an official statement. “Tariffs are taxes, they are bad for business and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy.”
WHAT NOW?
In response to the new tariffs, the EC is set to reinstate the previously suspended tariffs from the EU’s 2018 and 2020 rebalancing measures as of 1st April. This will mean higher duties on a wide range of American exports, including boats, bourbon and motorcycles. In addition, the Commission is preparing to introduce new retaliatory tariffs to address the broader scope of the US restrictions. This additional package of countermeasures will target €18 billion worth of American goods, ensuring that the economic impact of the EU’s response matches that of the US.
To implement these additional measures effectively, the EU has launched a two-week consultation process with European industry stakeholders, effective 12th March.
The proposed list of targeted products, which has been published on the EC Directorate-General for Trade and Economic Security website, includes a combination of industrial and agricultural goods. Industrial items under consideration include steel, aluminium, textiles, leather goods, home appliances and various household tools. The agricultural sector could see tariffs imposed on poultry, beef, seafood, nuts, dairy, sugar and vegetables.
Following the consultation period, the EC will assess feedback and finalise a draft act. The EC says the adoption process will conclude by mid-April after being reviewed by Member States, opening the door for the additional countermeasures to come into effect and marking a new phase in transatlantic trade, with potential long-term implications for global markets and international relations.
Read related:
President Trump moves to withdraw US from Paris Agreement on first day back in office
Monaco Life is produced by real multi-media journalists writing original content. See more in our free newsletter, follow our Podcasts on Spotify, and check us out on Threads, Facebook, Instagram, LinkedIn and Tik Tok.
Photo credit: Samuel Wölfl, Pexels