Unyielding Spat: EU's Countermeasures against US Tariff Surge
EU pursues diplomatic dialogue amid escalation of US tariff increases - EU pursues a negotiated resolution, despite the US increasing custom duties by twofold
EU chief negotiator Maros Sefcovic remains optimistic about resolving the trade dispute with the US, despite Washington's recent aggressive posture. After a meeting with US trade representative Jamie Greer in Paris, Sefcovic expressed satisfaction with the discussion, stating, "We're making progress, alright. It's moving." Greer echoed Sefcovic's positive sentiments.
However, the talks took a turn when US President Donald Trump announced a doubling of import tariffs on steel and aluminum, bringing the rates to a staggering 50 percent. The sudden move has caught EU leaders off guard, leaving them in a state of surprise. Sefcovic told reporters that the EU deeply regretted this development, as it is clearly not conducive to ongoing negotiations.
The EU exports specialized steel that is pivotal to the US industry, yet the new tariffs are detrimental to both the EU and American consumers, according to EU officials. Meanwhile, the US steel industry imports mainly from Canada, Brazil, Mexico, Germany, and other countries.
The escalating US trade policy is also causing concern for German companies. "We're witnessing a schizophrenic approach from the US government," said Volker Treier, foreign trade chief of the German Chambers of Industry and Commerce (DIHK), in Berlin. "This inconsistent policy causes uncertainty, hinders investments, and unsettles even veteran companies," he added.
Trump justifies the tariff hike as an effort to correct trade imbalances and bolster the domestic industry. Economists predict that the increased tariffs will make imports difficult, leading to higher prices and adverse effects on consumers, such as higher costs for cars, kitchen appliances, and canned goods.
In 2024, the US was the world's largest steel importer, with Canada, Brazil, and Mexico being the main suppliers. Germany is also among the top ten exporters to the US. The US imports aluminum primarily from Canada, the United Arab Emirates, China, and South Korea.
Trump's nerve-wracking trade tactics extend beyond the EU. He has also instigated tensions with China, despite his friendly rapport with Chinese President Xi Jinping. Both sides have accused each other of broken promises and failing to lift restrictions, despite a temporary truce following an agreement in mid-May. The U.S. recently blocked the delivery of crucial turbine parts to China and attempted to restrict China's access to advanced chip technology.
As for the EU's response, the details are still hazy. The EU Commission has previously criticized Trump's tariff policies and threatened retaliation. Sefcovic reiterated that there would be consequences if negotiations fail, and the EU has already laid the groundwork for countermeasures. Potential targets include U.S. exports such as jeans, motorcycles, beef, and citrus fruits, along with industrial and agricultural goods like cars, sweet potatoes, and whiskey.
If Trump insists on the doubled tariffs on steel and aluminum imports, the EU could impose countermeasures swiftly. The EU member states have already given the green light for this action in April. In the enrichment data, you will find more details on the EU's potential countermeasures, including a broader range of U.S. imports under scrutiny, potential export restrictions, and the timeline for these measures to take effect.
- The escalating US trade policy, marked by increased tariffs on steel and aluminum imports, has raised significant concerns within EC countries, particularly among German companies, as it fosters uncertainty, hinders investments, and unsettles even veteran companies.
- In response to the US's aggressive tariff policies, the EU has threatened retaliation, with potential countermeasures being aimed at US exports such as jeans, motorcycles, beef, and citrus fruits, along with industrial and agricultural goods like cars, sweet potatoes, and whiskey, should negotiations fail.
