Key points
- Announcement comes after US imposed 25pc tariffs
- EU will target US steel and aluminium products
- Textiles, agricultural products and home appliances will also be targeted
ISLAMABAD: The European Union (EU) launched countermeasures on Wednesday against new US metals tariffs, with plans to impose its own duties on €26 billion ($28.3 billion) worth of American goods.
According to Bloomberg, the announcement came hours after the US administration imposed 25 per cent tariffs on steel and aluminium imports in a massive escalation of the trade war between two longstanding allies. The EU will immediately begin consultations with member states, with adoption of the tariffs expected in mid-April. “The European Union must act to protect consumers and business,” European Commission President Ursula von der Leyen said in a statement. “The countermeasures we take today are strong but proportionate.”
According to AFP, the European Commission said Wednesday it would impose “a series of countermeasures” from April 1 in response to the “unjustified trade restrictions” from the United States. “We deeply regret this measure,” European Commission chief Ursula von der Leyen said in a statement, adding: “As the US are applying tariffs worth $28 billion, we are responding with countermeasures worth” the equivalent in euros.
The European Union must act to protect consumers and business.” – European Commission President Ursula von der Leyen
Four times
According to Bloomberg, for Europe, the new tariffs will be nearly four times the size of similar duties imposed during Trump’s first term, when the US targeted nearly $7 billion of the bloc’s metals exports, citing national security concerns. The EU will target US steel and aluminium products as well as textiles, agricultural products and home appliances.
The EU will also hit products from its previous trade fight with Trump such as boats, bourbon and motorbikes, according to the statement.
In addition, Trump has announced reciprocal tariffs coming in early April based on policies of partners that are seen as obstacles to US trade, including Europe’s value-added tax, and has targeted certain goods including European cars.
The EU’s trade chief, Maros Sefcovic, traveled to Washington last month to try to find an amicable solution with senior members of the Trump team including US Commerce Secretary Howard Lutnick. He offered lowering tariffs on industrial goods, including cars, one of Trump’s longstanding demands, and increasing US imports of liquefied natural gas and defence goods.
“The US administration doesn’t seem to be engaging to make a deal,” Sefcovic said on Monday. “As the US is watching over their interests, so is the EU,” he said, adding that the bloc “will always protect European businesses, workers and consumers from unjustified tariffs because we know they expect no less from us.”
The US administration doesn’t seem to be engaging to make a deal.” – EU trade chief Maros Sefcovic
Brussels said earlier that it would retaliate on any US move swiftly and proportionately and has been working for months on various lists of goods to hit, including politically sensitive products from certain US constituencies that would inflict more economic pain on the US side than the European economy.
Two-fold impact
In the European steel market, producers are bracing for a two-fold impact, with European exports to the US set to fall, and the region’s imports set to rise as metal is re-routed away from the US.
“We can indeed expect the EU market – already saturated with cheap steel imports from Asia, North Africa and the Middle East — to be further flooded as steel intended for the US market is redirected because of the new tariffs,” a spokesperson for industry lobby group Eurofer said.
During the first Trump presidency, for every three tonnes of steel deflected from the US market because of tariffs, two tonnes went to the EU, the spokesperson said.
Aluminium producers are also bracing for a surge in imports, particularly from Canada, which typically supplies more than half of the aluminium that the US imports.
For the EU, the fight over American metals tariffs started in 2018 during Trump’s first term, when the US hit steel and aluminium exports with duties, citing national security concerns. At the time, officials in Brussels scoffed at the notion that the EU posed such a threat.
The 27-nation bloc retaliated by targeting politically sensitive companies with retaliatory duties, including Harley-Davidson Inc. motorcycles and Levi Strauss & Co. jeans.
The two sides agreed to a temporary truce in 2021, when the US 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.
All suspended metals tariffs are due to be reintroduced in full, including some levies that have never previously been in force. As a first step, all suspended EU tariffs on about $8 billion of US products are set to snap back into place at the end of March, according to Bloomberg.
Sweeping levies
Earlier, according to AFP, the United States broadened its slate of tariffs Wednesday as sweeping levies on steel and aluminium imports took effect “with no exceptions or exemptions” as promised by the White House — despite countries’ efforts to avert them.
President Donald Trump’s 25 per cent duties on both metals will likely add to the cost of producing various goods from home appliances to automobiles and cans used for drinks, threatening to raise consumer prices down the road.
“It wouldn’t surprise me to see the tariffs pretty quickly show up in prices,” Cato Institute research fellow Clark Packard told AFP.
He added that auto manufacturing and construction — spanning both residential and commercial buildings — are among the biggest users of steel in the country.
It wouldn’t surprise me to see the tariffs pretty quickly show up in prices.” – Cato Institute research fellow Clark Packard
It is unclear if Trump will, as he did in his first administration, eventually grant relief to some countries and cut deals with others.
Looking ahead, Trump has vowed separate reciprocal levies as soon as April 2 to remedy trade practices Washington deems unfair, raising the potential for more products and trading partners to be specifically targeted, according to AFP.
