FT: EU to Retaliate Against US Steel and Aluminum Tariffs

The European Union (EU) announced today that it will retaliate against the tariffs imposed by the United States on steel and aluminum imports with “firm and proportionate countermeasures” as officials in Brussels scramble to prevent a trade war with Washington. “The EU will act to protect its economic interests. We will safeguard our workers, businesses, and consumers,” said European Commission (EC) President Ursula von der Leyen today.

US President Donald Trump officially enacted a 25% tariff on all US steel and aluminum imports yesterday, set to take effect on March 12. EU member states have already approved up to 50% tariffs on €4.8 billion worth of US imports, which could be implemented with a swift final vote. Targeted products include bourbon whiskey, Harley-Davidson motorcycles, motorboats, and certain types of steel and aluminum.

Leyen is scheduled to meet today with US Vice President J.D. Vance in Paris to discuss the matter, while the EC has called a meeting of European trade ministers for tomorrow afternoon.

EU Trade Commissioner Maros Sefcovic told the European Parliament that the bloc aims to negotiate. “We remain committed to constructive dialogue. We are ready for negotiations and to find mutually beneficial solutions whenever possible.”

“There is a lot at stake for both sides. We want to make this work because it makes sense,“ the commissioner said. “The EU sees no justification for imposing tariffs on our exports, as they are economically counterproductive—especially given the deep integration of supply chains established through our extensive transatlantic trade and investment ties.”

“Tariffs are taxes—bad for businesses, even worse for consumers.”

European imports of bourbon whiskey had already been targeted in previous EU retaliation against Trump’s first-term metal tariffs. That dispute was resolved under former President Joe Biden, but not permanently.

The tariff war is expected to return at the end of March, but it could be accelerated if most EU countries agree. The EU could also escalate its retaliation, though Leyen emphasized that any response would be “proportional.”

The European steel industry has already been shrinking, with 2023 marking the lowest production levels in history. According to Axel Eggert, Director-General of Eurofer, the European Steel Association, tariffs on approximately 3.7 million tons of annual exports will have a significant impact.

“The ‘last ton‘ is the most profitable because we have very high fixed costs that remain constant regardless of production volume,“ Eggert explained.

He added that steel from other parts of the world that can no longer enter the US market could also be redirected to Europe, pushing prices even lower.

Ukraine, whose steel industry has been devastated by Russia’s large-scale invasion nearly three years ago, will also be affected by the US tariffs.

“We are determined to work actively with partners to find the best solution before March 12,“ Ukrainian Deputy Prime Minister and Minister of Economy Yulia Svyrydenko said today on X (Twitter).

UK Holds Back on Retaliation

The UK has not threatened retaliation against US steel and aluminum tariffs. Prime Minister Keir Starmer seeks to avoid a trade war with Trump while strengthening economic ties, particularly in technology and professional services.

Although the prime minister’s allies say no decision has been made on how to respond to the new tariffs, the British government is downplaying expectations of any countermeasures. Starmer noted that the US accounted for only 5% of UK steel exports and 6% of aluminum exports in 2023.

Despite the UK’s pro-free-trade stance, the government has also prepared contingency plans if the situation escalates. The British steel industry warns that Trump’s decision would be a “devastating blow“ to the sector.

Source: Valor

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