The European Union is enacting retaliatory tariffs against various U.S. products in response to President Donald Trump’s 25 percent steel and aluminum tariffs that went into effect Wednesday.
The EU tariffs will impact up to $28 billion of U.S. exports once they are implemented next month in two phases beginning April 1 and April 13. U.S. goods that will be impacted by the tariffs include steel and aluminum products, textiles, bourbon, motorcycles, and numerous agricultural products.
“We deeply regret this measure. Tariffs are taxes. They are bad for business, and even worse for consumers. These tariffs are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices will go up. In Europe and in the United States. The European Union must act to protect consumers and business,” European Commission president Ursula von der Leyen said in a statement.
In the meantime, the EU remains open to negotiating with the U.S. to find alternative solutions to tariffs. Von der Leyen said European trade commissioner Maros Sefcovic will be engaging in dialogue with U.S. partners.
“Sadly, the tariffs imposed by the US today go firmly in the wrong direction. While the EU will continue to engage towards finding win-win deals, we have made clear from the start that unjustified tariffs on our exports will not go unanswered, and we will not shy away from protecting our legitimate economic interests,” Sefcovic said.
President Trump’s 25 percent steel and aluminum tariffs went into effect Wednesday and will impact $28 billion of European exports. The EU countermeasures will consist of tariffs originally imposed during Trump’s first term starting on April 1. Later in the month, the EU will hit the U.S. with $19.6 billion of additional tariffs to match the value of Trump’s tariffs.
The American spirit industry will be hit hardest by the ongoing tariff dispute between the U.S. and Europe. The trade association representing distilled spirts said the new EU tariffs will harm U.S. farmers and distillers during a time when the industry is already experiencing a slowdown.
“Reimposing these debilitating tariffs at a time when the spirits industry continues to face a slowdown in U.S. marketplace will further curtail growth and negatively impact distillers and farmers in states across the country,” said distilled spirits council president Chris Swonger.
“We urge the U.S. and EU governments to come to a resolution that gets our spirits industry back to zero-for-zero tariffs. This is a model that has allowed spirits exports between the U.S. and EU to flourish and is in line with President Trump’s vision for fair and reciprocal trade.”
Trump’s tariffs aim to create U.S. manufacturing jobs and help correct perceived trade imbalances with U.S. partners. The steel and aluminum tariffs are the first ones of Trump’s second term to be applied universally to all other countries.
The tariffs could increase tension between the U.S. and European nations as Trump continues pushing for a peace agreement to halt the war between European and Russia. Ukraine agreed to a 30-day ceasefire proposal Tuesday afternoon following talks with U.S. counterparts in Saudi Arabia, but it remains unclear if Russia is open to stopping the war fighting.
Elsewhere, Trump doubled U.S. tariffs on Canadian steel and aluminum Tuesday to 50 percent, escalating his trade war against America’s neighbor to the north. He did so following Ontario’s 25 electricity tax on New York, Michigan, and Minnesota, a policy that Ontario premier Doug Ford suspended Tuesday afternoon after Trump’s fresh tariffs. Canadian leaders roundly condemned the tariffs and made clear they will pursue retaliatory options against U.S. exports to counter them.
Trump’s escalating trade war against historical U.S. allies has not been received well on Wall Street, with market indexes dropping precipitously over the past couple days. But, markets opened higher Wednesday morning due to lower than expected inflation numbers for February.