Europe retaliates against Trump’s tariffs on steel and aluminum

Open this photo in gallery:

The European Union and the United States are on the verge of a drawn-out and nasty trade war, with the imposition of tariffs and countertariffs, and the threat of more to come.

The EU’s tariffs on Wednesday were reprisals that were announced only hours after the United States levied global 25-per-cent tariffs on steel and aluminum and products made from those metals.

President Donald Trump vowed to retaliate against the EU tariffs on US$28-billion in U.S. goods that are scheduled to start at various times in April, after consultation with the bloc’s 27-member states.

“Of course I’m going to respond,” Mr. Trump told reporters at the White House. “The problem is our country didn’t respond. Look, the EU was set up in order to take advantage of the United States.”

Canada to impose retaliatory tariffs on $29.8-billion worth of U.S. steel, other goods, source says

The U.S. tariffs will especially hurt Canada, which is the top exporter of steel and aluminum to the United States. The EU’s exports of aluminum to the United States are fairly small, not so its steel exports. According to the U.S. Census Bureau, Germany alone in 2024 delivered some US$2.9-billion of steel to American customers.

The European Commission, the EU’s executive arm, said it was a reluctant participant in the transatlantic trade war but had no choice but to respond.

“The European Union must act to protect consumers and business,” EC president Ursula von der Leyen said in a statement Wednesday morning. “The countermeasures we take today are strong but proportionate,” adding that “tariffs are taxes. They are bad for business, and even worse for consumers.”

Debra Thompson: What’s Trump’s real strategy? It’s all about retribution

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

The EU’s countertariffs took place after the bloc’s trade chief, Maros Sefcovic, failed to broker a trade peace agreement with the White House. Last month, he offered to reduce the tariffs on American-made cars and other industrial products in exchange for lighter treatment on the steel and aluminum tariffs that Mr. Trump had vowed to implement.

Mr. Sefcovic also offered to increase imports of American-made weapons and U.S. liquefied natural gas. LNG has played an ever-bigger role in the European energy markets since Russia invaded Ukraine in 2022 and cut off gas exports to Germany and other Western European countries.

The Trump administration did not accept the EU’s offer. “The U.S. administration doesn’t seem to be engaging to make a deal,” Mr. Sefcovic said earlier this week. “As the U.S. is watching over their interests, so is the EU.”

Open this photo in gallery:

The new EU tariffs will target American-made steel and aluminum products, industrial goods, home appliances, textiles and agricultural goods such as poultry and beef. The EU will also reinstate measures that were introduced in Mr. Trump’s first term, including tariffs on bourbon whisky, cosmetics, Harley-Davidson motorcycles and jeans.

On Tuesday, Mr. Trump said he would double the tariffs to be applied on steel and aluminum imports from Canada to 50 per cent, only to reverse course the same day, after Ontario suspended its decision to apply a 25-per-cent surcharge on electricity exported to the United States.

European steel and aluminum makers are set to suffer setbacks now that the U.S. 25-per-cent tariffs are in place. Their exports to the United States will fall. At the same time, imports of steel and aluminum products to Europe will rise as manufacturers in India, China and other countries reroute their products away from the United States.

Eurofer, the European steel association, said recently that the Trump tariffs could cost the EU 3.7 million tonnes of steel exports. The United States is the second-biggest market for EU steel producers. “Losing a significant part of these exports cannot be compensated by EU exports to other markets,” Eurofer president Henrik Adam said.

UK Steel, the British industry group, also had dire warnings about the effects of the U.S. tariffs.

“These tariffs couldn’t come at a worse time for the U.K. steel industry, as we battle with high energy costs and subdued demand at home, against an oversupplied and increasingly protectionist global landscape,” said Gareth Stace, the group’s director-general. “What’s more, the EU is also pushing ahead with trade-restrictive action that will amplify the impact of U.S. tariffs.”

The steel and aluminum tariffs, which could be followed by other Trump tariffs on everything from wine to cheese imports, were widely condemned in many other countries. But the responses from Canada and the EU were by far the toughest on Wednesday. Brazil, which is the third-biggest exporter of steel to the United States, did not announce retaliatory tariffs. Finance Minister Fernando Haddad said his country would try to negotiate a solution that would not punish Brazilian steel.

Speaking on ABC-TV, Ed Husic, Australia’s Industry and Science Minister, said, “Let’s call a spade a spade. I think this is a dog act after over a century of friendship.”