EU Launches Retaliatory Tariffs Against U.S. Trade Policies

The European Union announced on Wednesday a series of countermeasures targeting U.S. industrial and agricultural goods, set to take effect on April 1. This response comes in light of the Trump administration’s imposition of a 25% tariff on all steel and aluminum imports.

As the world’s largest trading bloc, the EU had anticipated the U.S. tariffs and prepared accordingly. Nevertheless, these new measures exacerbate an already strained relationship between Europe and the United States. Just last month, U.S. officials warned that Europe would need to assume greater responsibility for its own security.

The EU’s countermeasures will affect approximately €26 billion ($28 billion) worth of American products, extending beyond steel and aluminum to include textiles, home appliances, and a variety of agricultural goods. High-profile items such as motorcycles, bourbon, peanut butter, and jeans will again face tariffs, reminiscent of the punitive measures enacted during Trump’s first term.

The United Kingdom, which is no longer part of the EU, has opted against imposing similar retaliatory tariffs. The British government expressed disappointment over Washington’s decision to levy the tariffs.

European Commission President Ursula von der Leyen, in her announcement, emphasized the EU’s readiness for dialogue. “As the U.S. implements tariffs worth $28 billion, we respond with countermeasures valued at €26 billion,” she stated, underscoring the bloc’s commitment to negotiation. “In a world filled with geopolitical and economic uncertainties, it is not in our shared interest to burden our economies with tariffs.”

The EU’s retaliation will not only affect steel and aluminum but also textiles, leather goods, home appliances, tools, plastics, wood, and a variety of agricultural products, including poultry, beef, seafood, nuts, eggs, sugar, and vegetables.

While Trump has maintained that these tariffs are designed to bolster U.S. manufacturing jobs, von der Leyen warned, “Jobs are at stake. Prices will rise in both Europe and the United States.” She expressed regret over the tariffs, labeling them as detrimental to both businesses and consumers, and noted their disruptive impact on supply chains.

The EU’s action follows a historical precedent, as similar tariffs were imposed by Trump during his presidency, prompting a wave of retaliatory measures from European allies.

This latest move by the EU will unfold in two phases. Initially, the bloc will reintroduce “rebalancing measures” that were in place from 2018 to 2020 but were temporarily halted under the Biden administration. Following that, additional duties will target €18 billion ($19.6 billion) in U.S. exports.

EU Trade Commissioner Maroš Šefčovič, who visited Washington last month to discuss the tariffs with U.S. officials, stated that it became evident during his trip that “the EU is not the problem.” He expressed a desire to avoid unnecessary trade friction, highlighting the need for cooperation.

The European steel industry could be significantly impacted, with estimates suggesting a potential loss of up to 3.7 million tons in exports. Henrik Adam, president of the Eurofer European steel association, warned that these developments would worsen an already challenging market environment, as the U.S. remains a crucial destination for EU steel, accounting for 16% of total exports.

With the annual trade volume between the EU and the U.S. estimated at around $1.5 trillion—representing approximately 30% of global trade—the stakes are high. The EU maintains a substantial goods export surplus, although this is somewhat counterbalanced by a U.S. surplus in services.

On the British front, Business Secretary Jonathan Reynolds affirmed the UK’s commitment to engaging with the U.S. to safeguard business interests, leaving the door open for potential future tariffs. Prime Minister Keir Starmer has sought to strengthen ties with the U.S. in hopes of avoiding the tariffs that have affected numerous trading partners. Reynolds reiterated the government’s focus on negotiating a broader economic agreement with the U.S. to mitigate additional tariffs and bolster the UK economy.