Trade War Escalates: Europe Strikes Back with $28 Billion in Counter-Tariffs
The European Union (EU) plans to impose counter-tariffs on American goods worth €26 billion ($28.33 billion) starting next month, in response to U.S. tariffs on steel and aluminum imports, according to a statement released by the European Commission on Wednesday.
EU Responds to U.S. Steel and Aluminum Tariffs
The announcement came just hours after the U.S. administration imposed tariffs on steel and aluminum imports, marking a significant escalation in the trade war between the two long-standing allies. The EU stated that it will retaliate by reintroducing tariffs on American products, including whiskey, motorcycles, and boats, effective April 1.
In a statement, European Commission President Ursula von der Leyen said, “The EU must act to protect European consumers and businesses.” She added, “The countermeasures we are taking today are strong but proportionate.”
Economic Impact of U.S. Tariffs on Europe
The European Commission highlighted that the new U.S. tariffs will affect EU exports worth €26 billion ($28.3 billion), representing about 5% of the EU’s total goods exports to the United States. This could lead American importers to pay up to €6 billion in additional tariffs.
For Europe, the new counter-tariffs are nearly four times the size of similar measures imposed during the first Trump administration. At that time, the U.S. targeted approximately $7 billion in EU steel exports, citing national security concerns.
Trump’s 25% Tariffs on Steel and Aluminum
On Wednesday at 04:01 GMT, U.S. tariffs of 25% on steel and aluminum imports took effect, pushing the United States further toward a trade war with its major partners. Former President Donald Trump had signed two executive orders on February 10, imposing these tariffs on steel and aluminum imports from all countries, effective March 12, with “no exceptions or exemptions.”
These steep tariffs on the two metals are likely to increase production costs across various industries in the U.S., from household appliances to cars and beverage cans. This threatens to raise consumer prices in the future.
Rising Costs for U.S. Industries
Clark Packard, a researcher at the Cato Institute, told AFP, “I wouldn’t be surprised if we see tariffs reflected in prices quickly.” He noted that the automotive and construction sectors—both residential and commercial—are among the largest consumers of steel in the U.S., meaning price increases in these industries will be particularly noticeable.
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