In a rapid response to President Donald Trump’s implementation of 25% tariffs on steel and aluminium, the European Union (EU) unveiled its countermeasures early Wednesday morning. As the tariffs took effect for major US trading partners just after 06:00 in Brussels, it was midnight in Washington DC, marking a significant escalation in transatlantic trade tensions.
European Commission President Ursula von der Leyen stated,
“Tariffs are taxes. They are bad for business, and worse for consumers.”
The EU’s immediate response will target a range of American products starting April 1, including jeans, motorcycles, peanut butter, and bourbon, reminiscent of the tariffs imposed during the Trump administration in 2018 and 2020.
Potential for broader trade implications
Looking ahead, the EU plans to expand its list of targeted US imports by mid-April, potentially incorporating an extensive array of textiles, home appliances, food, and agricultural products. A nearly 100-page document detailing the items under consideration includes categories such as meat, dairy, fruit, wine, spirits, and even household items like toilet seats and lawnmowers.
This move raises concerns about rising prices in European supermarkets, particularly for American goods. Dirk Jandura, head of Germany’s BGA federation of wholesale and foreign trade, emphasized that consumers might face increased costs for products like orange juice, bourbon, and peanut butter, stating,
“Margins in trade are so low that this cannot be absorbed by the companies.”
Overall, the EU’s new tariffs are expected to target around €26 billion (£22 billion) of US exports.
Calls for de-escalation amid rising tensions
António Costa, the EU’s Council President, has urged the US to de-escalate the situation, though indications of such a shift appeared slim on Wednesday as President Trump reiterated his intention to retaliate against the EU’s measures. Trump declared,
“We’ve been abused for a long time, and we will be abused no longer.”
In Austria, concern about the potential consequences of the trade war was echoed by Christoph Neumayer, head of the Federation of Austrian Industries, who highlighted the importance of unity and decisive action from Europe.
EU officials noted that alternative sourcing for products like soybeans and orange juice from Brazil and Argentina could mitigate some consumer impacts. Additionally, it was suggested that certain US exports targeted by the EU originated from Republican-controlled states.
The drinks sector is poised to face significant challenges on both sides of the Atlantic. Pauline Bastidon of Spirits Europe remarked on the solidarity among producers affected by the tariffs, noting that both EU and US companies are at risk. Chris Swonger of the US Distilled Spirits Council expressed disappointment over the reimposition of tariffs, reflecting on the progress made since the suspension of previous tariffs on American whiskey.
In the cognac industry, French producers face dire prospects as a potential 25% import tax looms, exacerbated by existing Chinese tariffs. Bastien Brusaferro of the general winegrowers’ union warned, “Morale is down in the dumps,” highlighting the significant job risks in regions reliant on exports.
Henrik Adam, head of the European Steel Association, cautioned that Trump’s “America First” policy could devastate the European steel industry. He noted that the initial 2018 tariffs had already resulted in a drastic reduction of EU steel exports to the US and predicted even greater repercussions from the latest measures.