EU responds to Trump’s steel and aluminum tariffs with 26 billion euros in tariffs on US products

Brussels – “Strong and proportionate,” and above all, immediate countermeasures. The European Union stands ready, and on the day the “new and unjustified” 25 percent US tariffs on steel and aluminum come into effect, it returns the favor to its overseas ally. From April 1, Brussels will apply tariffs on US goods worth up to 26 billion euros. While striking with one hand, Ursula von der Leyen extends the other toward Donald Trump: “We will always remain open to negotiation,” the EU leader said.

The European Commission “deeply regrets” Trump’s move, which drags the two sides of the Atlantic into a dangerous trade war. On February 10, the new US administration announced an increase in tariffs on imports of steel, aluminum, and related products from the EU from 10 percent to 25 percent: a month later, despite numerous appeals from European capitals, Washington “does not seem committed to finding an agreement,” the EU trade commissioner, Maroš Šefčovič, said only two days ago.

As of today (March 12), therefore, not only do the tariffs imposed by the first Trump administration in 2018, which affected different types of semi-finished and finished products such as steel pipes, wire, and tin foil, come back into effect, but also those on other derivative products such as household items, cookware or fixtures, and various machinery – only partly derived from steel and aluminum – such as gym equipment, some household appliances or furniture. The US tariffs will affect 26 billion euros of EU exports, about 5 percent of the value of European goods entering the United States. Based on current import flows, the European Commission calculates that US importers will pay up to 6 billion euros out of their pockets for Trump’s protectionist move.

“Tariffs are taxes,” von der Leyen stressed again this morning. “They are harmful to businesses and even worse to consumers.’ According to EU Commission sources, those imposed by Trump “are not smart” because they will “really hurt their economy.” The EU has planned a two-step response: from April 1, the old rebalancing measures to the 2018 and 2020 tariffs, which apply to a range of products from boats to motorcycles to liquor like bourbon, will be reinstated. These “respond to the economic damage done to €8 billion of EU steel and aluminum exports,” the EU executive estimates.

After consultation with member states and stakeholders, a new package of tariffs on US products will go into effect in mid-April. This second round of countermeasures will cover goods worth about 18 billion euros, thus equalizing the value of the US offense. At issue are industrial products – steel and aluminum, textiles, leather goods, home appliances, household utensils, plastics, wood products – and agricultural products, including poultry, beef, some seafood, nuts, eggs, dairy products, sugar, and vegetables. Brussels aims to conclude consultations on the new list of products subject to tariffs by March 26 and then quickly finalize the implementing act to be adopted by member states. The goal is for these measures to enter into force as early as mid-April.

As EU sources explain, the Commission is putting together a well-calibrated and careful package, “trying to hit the United States in areas that are important to them but will not cost the EU as much.” Just as American businesses and consumers will pay for Trump’s decision, the countermeasures that Brussels will impose will weigh on the socio-economic fabric of member countries. The European Commission reportedly aims to hit mainly products essential to the economies of states with a Republican majority. At the same time, it is ensuring it has good alternatives in global markets. For example, “we will be quite happy” to buy soybeans from Brazil to replace the Republican stronghold of Louisiana, a source said.

Meanwhile, the EU reiterates that it is ready to work with the US administration to negotiate a solution. “The above-mentioned measures can be reversed at any time should such a solution be found,” the Commission said. “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,” is the appeal made to Washington by von der Leyen, who once again entrusted Šefčovič to “resume his talks to explore better solutions with the US.”