EU targets US$26bn US products in tariff retaliation

The European Union launched countermeasures on Wednesday against new US metals tariffs, with plans to impose its own duties on up to €26 billion (US$28,3 billion) worth of American goods.

The announcement came hours after the US administration imposed 25 percent tariffs on steel and aluminum imports in a massive escalation of the trade war between the longstanding allies.

The EU will target politically sensitive goods in Republican-led states, including soybeans from Louisiana, home to House Speaker Mike Johnson, according to a senior EU official.

EU metals tariffs that had been put in place during Trump’s first term, and later suspended, are due to be reintroduced in full on April 1, including some levies that have never previously been in force.

The EU will also immediately begin consultations with member states, with the aim of adopting the additional lists of agricultural and industrial goods subject to tariffs as high as 25 percent by mid-April.

Officials said the idea is to allow a window for negotiations, which will be led by the bloc’s trade chief, Maros Sefcovic.

“The countermeasures we take today are strong yet proportionate,” European Commission President Ursula von der Leyen told reporters at a briefing in Strasbourg. “We firmly believe that in a world fraught with geo-economic and political uncertainties, it is not in our common interest to burden our economies with such tariffs.”

While the EU announced immediately retaliatory steps, other affected countries, including the UK, refrained from immediate action and called for negotiations.

European stocks rallied on Wednesday, with the Stoxx Europe 600 gaining 0,7 percent and Germany’s DAX rallying 1,2 percent as traders reacted to progress toward a ceasefire in the war in Ukraine. The euro was little changed, pausing after a sharp rally in the past days.

For Europe, the new levies will be nearly four times the size of similar duties imposed during Trump’s first term, when the US targeted €6,4 billion of the bloc’s metals exports, citing national security concerns. – Bloomberg