EU Retaliates Against Trump Tariffs: What You Need to Know

EU Retaliates Against Trump’s Steel and Aluminum Tariffs with Countermeasures

The European Union has officially responded to the imposition of 25% tariffs on steel and aluminum imports by the United States, enacting a package of countermeasures targeting a range of American products. European Commission President Ursula von der Leyen announced the retaliatory measures, which took effect early Wednesday morning and aim to counteract what the EU considers unjustified and disruptive tariffs imposed by Washington.

EU’s Retaliatory Measures

The EU’s countermeasures target a variety of US exports, including:

• Boats
• Bourbon whiskey
• Harley-Davidson motorcycles
• Levi’s jeans
• Cosmetics
• Cranberry juice
• Orange juice
• Peanut butter
• Other agricultural products

These measures, valued at approximately €4.8 billion, aim to protect European businesses, workers, and consumers from the impact of the US tariffs.

Background and Justification

President Trump signed an executive order imposing the tariffs on steel and aluminum imports, affecting approximately €26 billion worth of EU exports. The EU argues that the tariffs disrupt deeply integrated transatlantic production chains and harm US citizens by raising business costs and fueling inflation. The EU sees no justification for the imposition of these tariffs and has warned that they will not go unanswered.

Potential Economic Impact

The EU, particularly Germany, is a major steel exporter to the US. The tariffs could threaten the EU’s $3.1 billion worth of metal exports across the Atlantic, with Germany and Italy being particularly exposed. Experts believe the tariffs will lead to higher prices, job losses, and economic uncertainty in both Europe and the United States. Stock futures fell, gold reached a new high, and the euro slid against the dollar amid Trump’s renewed tariffs.

International Reactions

Australian Prime Minister Anthony Albanese has sought an urgent call with Trump to request a special exemption from the tariffs, citing close U.S.-Australian strategic ties and the potential harm to U.S. workers. Australia exported 223,000 tonnes of steel and 83,000 tonnes of aluminum to the US last year. China’s retaliatory tariffs on US goods have also taken effect.

Future Actions

The EU may consider additional measures, such as tightening technical barriers to trade or restricting US companies from European public procurement tenders through its International Procurement Instrument. The European Commission has also laid the foundation for deploying its anti-coercion instrument (ACI). Which enables the EU to retaliate against third countries that are “coercing” the European Union.