EU says it will impose countermeasures against US tariffs

The European Union vowed to respond to 25 percent tariffs President Donald Trump said the US will impose on steel and aluminum imports, escalating a potential trade dispute with one of Washington’s closest allies.

“I deeply regret the US decision to impose tariffs on European steel and aluminum exports,” European Commission President Ursula von der Leyen said in a Tuesday statement. “Unjustified tariffs on the EU will not go unanswered — they will trigger firm and proportionate countermeasures.”

The tariffs follow through on Trump’s complaint that the EU treats the US “very unfairly,” and he often cites the bloc’s trade surplus with the US as a reason for punitive measures. The new rates will take effect on March 12, according to a pair of proclamations issued by the White House late Monday.

The EU has prepared multiple lists of American goods to hit with retaliatory tariffs if Trump moves forward with levies, modeling various possibilities depending on what the initial US salvo looks like, Bloomberg reported earlier.

In a speech Tuesday, German Chancellor Olaf Scholz said if the US “leaves us no other choice, then the European Union will react to this as one. As the largest market in the world with 450 million citizens, we have the strength to do so.”

For the EU, the fight over American metals tariffs started in 2018 during Trump’s first term, when the US hit nearly US$7 billion (HK$54.6 billion) of European steel and aluminum exports with duties, citing national security concerns. At the time, officials in Brussels scoffed at the notion that the EU posed such a threat.

The 27-nation bloc retaliated by targeting politically sensitive companies with retaliatory duties, including Harley-Davidson Inc. motorcycles and Levi Strauss & Co. jeans.

The two sides agreed to a temporary truce in 2021, when the US partly removed its measures and introduced a set of tariff-rate quotas above which duties on the metals are applied, while the EU froze all of its restrictive measures.

A European government official said that unfreezing tariffs that the EU imposed on the US after steel measures introduced by Trump during his first term, which are on pause until the end of March, would be quick to do should that be the EU response.

“This is a blatant case of protectionism and economic self harm,” Ignacio Garcia Bercero, non-resident fellow at Bruegel think tank and former senior EU negotiator with the US, said in an interview. “The EU should do smart and fast retaliation so that the US understands actions have consequences.”

As a first step, the suspension of previously adopted retaliation measures should be lifted, he said. Then the EU should start a consultation on an additional retaliation list that takes into account the larger impact of the new measures.

“The EU will act to safeguard its economic interests,” von der Leyen said in the statement. “We will protect our workers, businesses and consumers.”
 

BLOOMBERG