The European Union on Wednesday retaliated against new U.S. tariffs on its steel and aluminum products, reinstating duties on a slate of U.S. products and proposing new measures covering a raft of agricultural imports. Canada also announced its own retaliation measures, which featured new duties on a spate of consumer goods.
At midnight on Tuesday, an executive order signed by President Donald Trump last month went into effect ending exemptions to U.S. duties on steel and hiking tariffs on aluminum to 25%. The EU had negotiated a carve-out from U.S. steel and aluminum duties in 2022 by accepting quotas that allowed some volume of steel and aluminum to enter the U.S. duty-free; both exemptions were scrapped under the new EO.
“These tariffs are disrupting supply chains,” European Commission President Ursula von der Leyen said in a statement announcing the retaliation, adding that the "countermeasures we take today are strong but proportionate.”
The EU countermeasures, Von der Leyen says, will affect U.S. trade worth $28 billion, the same volume of EU trade that the new U.S. duties cover.
The retaliation will come in two waves, the Commission said. The first action, coming April 1, will see the EU retaliatory tariffs imposed under Trump’s first term come back into effect – as well as duties on around $4 billion of U.S. goods that were planned for 2021 but never implemented. This will hit iconic American products like Harley Davidson motorcycles, Kentucky bourbon, jeans and peanut butter.
The EU is also preparing to impose tariffs on a much larger list of products that will take effect later. It will take public comment on the 99-page list of products until March 26 and then let member states weigh in on the proposal.
U.S. agricultural products dominate this list, with poultry, beef, dairy, nuts, eggs, sugar and vegetables and wine among the imports set to see tariff increases. In its statement, the commission said it aims to have these duties in effect by mid-April.
In the past, the EU has calibrated duties to disproportionately impact the states of U.S. congressional leadership and those that voted for Trump.
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Asked on Wednesday during a meeting with Ireland's leader Michael Martin whether the U.S. would respond to the latest EU tariffs, the president said, "Of course I will respond." He added that Ireland, an EU member state, is among those that have been taking advantage of the U.S.
France’s Minister for European Affairs Benjamin Haddad suggested on Wednesday that the EU could also be willing to escalate its response further, if necessary. He told France’s TF1 television that U.S. digital services or intellectual property could be part of future retaliation, if it comes to that.
But the EU also said it remains open to finding an off-ramp to prevent the imposition of the new duties.
“[T]he EU remains ready to work with the US administration to find a negotiated solution,” the statement says. “The above mentioned measures can be reversed at any time should such a solution be found.”
Businesses are also pushing for a negotiated solution. On Wednesday, the American Chamber of Commerce to the European Union warned that the new duties from both sides would hurt transatlantic prosperity.
“The US administration’s new steel and aluminum tariffs are not the same as those imposed in 2018. They are more stringent and cover a range of downstream products, meaning their impact will be harsher and affect even more sectors,” AmCham EU CEO Malte Lohan said in a statement.
“These tariffs, along with the EU’s announced countermeasures, will only harm jobs, prosperity and security,” he added. “The two sides must de-escalate and find a negotiated outcome urgently.”
Canada also announced retaliatory steps on Wednesday. Canada's finance minister, Dominic LeBlanc, said during a press conference that his government would impose 25% "reciprocal" duties on some $21 billion of U.S. goods, starting Thursday. Around half of the covered U.S. products are steel and aluminum products, he said.
These duties will be applied in addition to the retaliatory tariffs that went into effect last week in response to the U.S.' 25% duties on all Canadian products and 10% duty on Canadian energy -- that Trump later narrowed in scope after giving a temporary carveout for imports covered by a North American trade deal.
During Wednesday's press conference, Canada's Foreign Minister Mélanie Joly called Canada America's "best and biggest" trade partner and urged U.S. citizens to "send a message" to the White House to end the tit-for-tat trade conflict.
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