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The European Union on Wednesday announced retaliatory trade action after the Trump administration officially increased tariffs on all steel and aluminum imports to 25 per cent, with duties on industrial and agricultural products that will go into effect April 01.
The world’s biggest trading bloc was expecting the US tariffs and prepared in advance, but the measures still place great strain on already tense transatlantic relations. Only last month, Washington warned Europe that it would have to take care of its own security in the future.
The EU measures will cover goods from the United States worth some 26 billion euros ($28 billion), and not just steel and aluminum products, but also textiles, home appliances and agricultural goods, according to an AP report.
Britain — which is not part of the EU — meanwhile said it would not impose retaliatory measures of its own on the United States. The UK government called Washington’s decision to impose 25 per cent tariffs on global steel and aluminum imports “disappointing.”
“As the US are applying tariffs worth 28 billion dollars, we are responding with countermeasures worth 26 billion euros),” European Commission President Ursula von der Leyen said in a statement. The commission manages trade and commercial conflicts on behalf of the 27 member countries.
“We will always remain open to negotiation. We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs,” von der Leyen said.
The commission also said that steel and aluminum products would be hit in return, but also textiles, leather goods, home appliances, household tools, plastics and wood. Agricultural products will also be impacted — including poultry, beef, some seafood, nuts, eggs, sugar and vegetables.
President Donald Trump said his taxes would help create US factory jobs, but von der Leyen said: “Jobs are at stake. Prices will go up. In Europe and in the United States.”
“We deeply regret this measure. Tariffs are taxes. They are bad for business, and even worse for consumers. These tariffs are disrupting supply chains. They bring uncertainty for the economy,” she said.
European steel companies have been bracing for losses.
“It will further worsen the situation of the European steel industry, exacerbating an already dire market environment,” Henrik Adam, president of the Eurofer European steel association, said last month.
He said the EU could lose up to 3.7 million tons of steel exports. The United States is the second biggest export market for EU steel producers, representing 16 per cent of the total EU steel exports.
“Losing a significant part of these exports cannot be compensated by EU exports to other markets,” Adam said.
Trump slapped similar tariffs on EU steel and aluminum during his first term, which enraged European and other allies. The EU also imposed countermeasures in retaliation at the time, raising tariffs on US-made motorcycles, bourbon, peanut butter and jeans, among other items.
The EU estimates that annual trade volume between both sides stands at about $1.5 trillion, representing some 30% of global trade. While the bloc has a substantial export surplus in goods, it says that is partly offset by the US surplus in the trade of services.
The commission says that trade in goods reached 851 billion euros ($878 billion) in 2023, with a trade surplus of 156 billion euros ($161 billion) for the EU. Trade in services was worth 688 billion euros ($710 billion) with a trade deficit of 104 billion euros ($107 billion) for the EU.
Meanwhile, British Business Secretary Jonathan Reynolds said Wednesday he would “continue to engage closely and productively with the US to press the case for UK business interests.” He did not rule out future tariffs on US imports, saying “we will keep all options on the table and won’t hesitate to respond in the national interest.”
Center-left Prime Minister Keir Starmer has worked to build strong ties with Trump, in hope of avoiding the tariffs levied on many other US trading partners.
Reynolds said the government remains “focused on a pragmatic approach and are rapidly negotiating a wider economic agreement with the US to eliminate additional tariffs and to benefit UK businesses and our economy.”