The European Union will impose counter tariffs on €26 billion worth of US goods from next month, the European Commission said on Wednesday, ramping up a global trade war in response to blanket US tariffs on steel and aluminium.
US president Donald Trump’s increased tariffs of 25 per cent on all steel and aluminium imports took effect on Wednesday as prior exemptions, duty free quotas and product exclusions expired.
The European Commission said it will end the current suspension of tariffs on US products on April 1st and will also put forward a new package of countermeasures on US goods by mid-April.
The suspended tariffs apply to products ranging from boats to bourbon to motorbikes, and the EU said it would now start a two-week consultation to pick other product categories.
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The new measures will target around €18 billion in goods, with the overall objective to ensure that the total value of the EU measures corresponds to the increased value of trade impacted by the new US tariffs, the EU said.
The proposed target products include industrial and agricultural products, such as steel and aluminium, textiles, home appliances, plastics, poultry, beef, eggs, dairy, sugar and vegetables.
“Our countermeasures will be introduced in two steps. Starting with 1 April and fully in place as of 13 April,” Ursula von der Leyen, the president of the European Commission, said in a statement.
“We are ready to engage in meaningful dialogue. I have entrusted trade commissioner Maros Sefcovic to resume his talks to explore better solutions with the US,” von der Leyen added.
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Mr Trump’s move to widen his trade offensive comes at a hazardous juncture seven weeks into his second term. His rapid effort to rewire the US economy as a global manufacturing power has rattled financial markets, spooked consumers still haunted by pandemic-era inflation and fueled recession fears amid mounting uncertainty for corporate America.
Investors largely took the news in stride. Aluminum was up 0.3 per cent on the London Metal Exchange after the tariffs kicked in, while hot-rolled coil — a key steel product — rose 0.4 per cent on the Shanghai Futures Exchange. Stocks were little moved.
Mr Trump pressed on with the metals tariffs despite a flurry of last-minute lobbying from US stakeholders, including the country’s largest aluminum producer, Alcoa Corp. The company warned the tariffs would imperil tens of thousands of jobs while raising prices for Americans already feeling their household budgets squeezed.
The president acted with the backing of some domestic industry executives, who say the protectionist measures could raise profits for US producers and bring steel and aluminum jobs back from overseas. - Reuters/Bloomberg
