BRUSSELS (AP) — The European Union on Wednesday announced retaliatory trade action with new duties on U.S. industrial and farm products, responding within hours to the Trump administration’s increase in tariffs on all steel and aluminum imports to 25%.
The world’s biggest trading bloc was expecting the U.S. 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. Motorcycles, bourbon, peanut butter and jeans will also be hit, as they were during President Donald Trump’s first term.
The EU duties aim for pressure points in the U.S. while minimizing additional damage to Europe. EU officials have made clear that the tariffs — taxes on imports — are aimed at products made in Republican-held states, such as beef and poultry from Kansas and Nebraska and wood products from Alabama and Georgia.
Spirits producers, who before tariffs were first introduced in 2018 enjoyed zero tariff trading in both the US and Europe, have in essence become collateral damage in the dispute over steel and aluminum. The EU move “is deeply disappointing and will severely undercut the successful efforts to rebuild US spirits exports in EU countries,” said Chris Swonger, head of the Distilled Spirits Council.
The EU moves to protect itself
European Commission President Ursula von der Leyen said in a statement that the bloc “will always remain open to negotiation.”
“As the U.S. are applying tariffs worth 28 billion dollars, we are responding with countermeasures worth 26 billion euros,” she said. The commission manages trade and commercial conflicts on behalf of the 27 member EU countries.
“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.
Trump said his taxes would help create U.S. 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.
American business group urges talks
The American Chamber of Commerce to the EU said the U.S. tariffs and EU countermeasures “will only harm jobs, prosperity and security on both sides of the Atlantic.”
“The two sides must de-escalate and find a negotiated outcome urgently,” the chamber said Wednesday.
What will actually happen?
Trump slapped similar tariffs on EU steel and aluminum during his first term in office, which enraged European and other allies. The EU also imposed countermeasures in retaliation at the time, raising tariffs on U.S.-made motorcycles, bourbon, peanut butter and jeans, among other items.
This time, the EU action will involve two steps. First,on April 1, the commission will reintroduce what it calls “rebalancing measures,” which the EU had from 2018 and 2020 but which were suspended under the Biden administration. Then on April 13 come the additional duties targeting 18 billion euros ($19.6 billion) in U.S. exports to the bloc.
EU Trade Commissioner Maroš Šefčovič traveled to Washington last month in an effort to head off the tariffs, meeting with U.S. Commerce Secretary Howard Lutnick and other top trade officials.
He said on Wednesday that it became clear during the trip “that the EU is not the problem.”
“I argued to avoid the unnecessary burden of measures and countermeasures, but you need a partner for that. You need both hands to clap,” Šefčovič told reporters at the European Parliament in Strasbourg, France.
European steel companies brace for losses
The EU could lose up to 3.7 million tons of steel exports, according to the European steel association Eurofer. The U.S. is the second biggest export market for EU steel producers, representing 16% of the total EU steel exports.
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 U.S. surplus in the trade of services.
Britain, which isn’t part of the EU, meanwhile said it won’t impose retaliatory measures of its own on the U.S. British Business Secretary Jonathan Reynolds said Wednesday he would “continue to engage closely and productively with the U.S. to press the case for U.K. business interests.”
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He did not rule out future tariffs on U.S. imports, saying “we will keep all options on the table and won’t hesitate to respond in the national interest.”
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McHugh reported from Frankfurt. Associated Press writer Jill Lawless in London contributed to this report.