Europe retaliates against Trump’s tariffs on steel and aluminum

The European Union retaliated against US President Donald Trump’s new 25% tariffs on steel and aluminum with counter tariffs on counter tariffs on US goods worth US$28 billion, which will begin in April.

“The European Union must act to protect consumers and businesses,” European Commission President Ursula von der Leyen said in a statement Wednesday morning. “The measures we are taking today are strong but proportionate.”

The announcement marks a massive escalation in the transatlantic and global trade war since Trump returned to the White House in January. During his first term as president, the US and the EU engaged in trade hostility, but reached a ceasefire in 2021 after Trump lost the election to Joe Biden.

The EU anti-government came after the bloc’s trade chief, Maros Sefcovic, did not mediate a trade peace agreement with the White House. Last month he offered to reduce tariffs on American-made cars and other industrial products in exchange for lighter treatments for steel and aluminum tariffs Trump had vowed to implement.

Sefcovic also offered to increase American-made weapons and US liquefied natural gas imports. LNG has played a role in expanding the European energy market since Russia invaded Ukraine in 2022 and shut down gas exports to Germany and other Western European countries.

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The Trump administration did not accept the EU’s offer. “The US administration doesn’t seem attractive to make deals,” Sevkovich said earlier this week. “The EU is also doing so, as the US is watching over their interests.”

The April launch of retaliatory tariffs suggests that EU trade officials are holding hope that Trump can cut the trade war with the bloc in the coming weeks, but he has given no indication that he is open to trade.

The new EU tariffs will target agricultural products such as American-made steel and aluminum products, industrial products, household appliances, textiles, and poultry and beef. The EU will also recover measures introduced during Trump’s first term, including tariffs on bourbon whiskey, cosmetics, Harley-Davidson motorcycles and jeans.

On Tuesday, Trump said he would double the tariffs applied to steel and aluminum imports from Canada to 50 percent in order to reverse courses that day after Ontario halted its decision to apply a 25 percent surcharge on electricity exported to the US.

European steel and aluminum manufacturers are set to suffer from set-offs as the US 25% tariffs are in place. Their exports to the US will decrease. At the same time, imports of steel and aluminum products into Europe will increase as manufacturers from India, China and other countries are out of the US.

Stocks of Germany’s Thyssenkrupp, one of Europe’s largest steelmakers, fell this week after a sharp increase in the past few months on the prospect of a massive increase in EU defence spending as the US moves away from Europe.

Eurofer of the European Steel Association recently said Trump’s tariffs could cost 3.7 million tonnes of steel exports to the EU. The US is the second largest market for EU steel producers. “Losing a large portion of these exports cannot be compensated by exports from the EU to other markets,” Eurofer President Henrik Adam said.

British industrial group British Steel also had a disastrous warning about the impact of US tariffs.

“These tariffs were not able to come at a bad time for the UK steel industry. We were unable to fight against high energy costs and suppressed demand at home, oversupported and increasingly protectionist global landscapes.” “In addition, the EU is also pushing for trade regulation actions that amplify the impact of US tariffs.”

Steel and aluminum tariffs, which could be followed by other Trump tariffs on everything else, from wine to cheese imports, have been widely criticized in many other countries.

On ABC-TV, Australia’s Minister of Industry and Science, Ed Fushik said: “Let’s call spades spades. I think this is a dog act after more than a century of friendship.”