In a bold response to the United States' latest tariffs on steel and aluminium imports, the European Commission has unveiled a comprehensive package of countermeasures aimed at restoring balance to the transatlantic trade relationship. This move comes after the US imposed new tariffs of up to 25% on EU steel and aluminium products, threatening significant economic consequences for European businesses, industries, and consumers. The EU has made it clear that such measures are unjustified and disruptive, and it has promised a firm but proportional response to safeguard its own interests.
The US Tariffs and the EU’s Response
The US tariffs were announced on February 10, 2025, marking the continuation of a trade dispute that first emerged under the Trump administration in 2018. These tariffs, imposed on steel and aluminium products, are designed to protect US manufacturers from what the US perceives as unfair competition due to global overcapacity, particularly from countries like China. However, the EU has consistently disagreed with these claims, arguing that it should not be penalized for practices it has not engaged in.
The Commission's reaction to the US's decision to impose tariffs is swift and calculated. President Ursula von der Leyen expressed deep regret over the US action, calling it harmful not only to European businesses but also to consumers. The imposition of these tariffs will increase prices for consumers on both sides of the Atlantic, disrupt supply chains, and create uncertainty in the global economy. To mitigate these negative effects, the EU has prepared a series of countermeasures that are designed to match the economic scale of the US tariffs while allowing room for future negotiations.
EU’s Two-Step Countermeasure Approach
The European Commission’s response consists of two primary phases. These are designed to gradually increase pressure on the US while still leaving the door open for diplomatic engagement and the potential resolution of the dispute.
1. Lapse of Existing Countermeasures (April 1, 2025): The first part of the EU’s strategy involves allowing the suspension of previous countermeasures from 2018 and 2020 to expire. These measures were originally introduced in response to earlier US tariffs and targeted a wide range of US goods, including agricultural products, motorcycles, and bourbon. The suspension of these measures will take effect on April 1, 2025, and is intended to signal the EU’s willingness to engage in negotiations with the US administration over a long-term resolution.
The value of these countermeasures is significant, targeting goods worth approximately €8 billion. The suspension will provide some breathing room for talks between the two sides. However, the EU has made it clear that should the US fail to engage in meaningful dialogue or lift its tariffs, the countermeasures will be reinstated.
2. New Countermeasures on US Exports (Mid-April 2025): The second part of the EU’s response will see the introduction of new countermeasures, which will take effect by mid-April 2025. These new measures are designed to mirror the economic scope of the US tariffs, which affect up to €26 billion worth of EU exports. The package will cover various US goods, including industrial-grade steel, aluminium, and derivative commercial products such as machinery parts, finished products, and even items as diverse as knitting needles. This broad scope reflects the extent to which the US tariffs have targeted European industries.
The new EU countermeasures will be phased in gradually, starting with a portion of the goods affected by the US tariffs. By April 13, 2025, the full scope of these countermeasures will be in place. This will ensure that the EU has a comprehensive and robust response to the new US tariffs, while maintaining proportionality and ensuring that the US feels the economic impact of its actions.
Economic Impact and the EU’s Strategy
The tariffs imposed by the US are far-reaching, and their economic implications are considerable. The US's decision to impose a 25% tariff on steel and aluminium imports could raise prices, disrupt established supply chains, and cause significant harm to industries on both sides of the Atlantic. For the EU, steel and aluminium are critical sectors, contributing to jobs and economic stability within the bloc.
The European Commission has expressed concern that the tariffs will lead to higher prices for consumers and businesses, particularly in sectors dependent on steel and aluminium. Moreover, the new tariffs on derivative products could further exacerbate the situation, as it would increase costs for a wide range of industries that rely on steel and aluminium as raw materials. As such, the EU’s countermeasures are intended not only to protect European manufacturers but also to safeguard consumers and prevent the escalation of prices.
President Ursula von der Leyen underscored the importance of keeping the global economy stable and fair. She reiterated that tariffs are essentially taxes, and these new US tariffs, if allowed to stand, would harm both US and European consumers by making products more expensive. The EU’s countermeasures are designed to minimize the economic fallout for the EU while signaling that unfair trade practices cannot go unchecked.
The EU’s Diplomatic Position
While the EU has launched these countermeasures, it has made it clear that it remains open to discussions with the US. The European Commission’s response is not intended to escalate tensions further but rather to bring both sides back to the negotiating table. EU officials continue to stress the importance of finding a solution through dialogue, as both parties benefit significantly from a strong and stable trade relationship.
Trade Commissioner Maroš Šefčovič has been tasked with continuing discussions with the US to find a way to resolve the dispute. The EU hopes that through these talks, the US will recognize that its tariffs are not the right approach and that a fairer and more cooperative trade framework can be established.
Background of the Dispute
The trade conflict between the EU and the US over tariffs on steel and aluminium dates back to 2018 when President Donald Trump first imposed tariffs on EU steel and aluminium imports. These tariffs were justified by the US as a national security measure, aimed at addressing global overcapacity issues. However, the EU strongly opposed this reasoning, arguing that it was unfair to target European products.
In response to the initial tariffs, the EU introduced countermeasures on US goods, including items like motorcycles, bourbon, and agricultural products. These countermeasures were seen as a necessary step to protect European industries from the economic damage caused by US tariffs. The situation escalated in January 2020 when the US introduced additional tariffs targeting certain derivative steel and aluminium products. The EU again responded with countermeasures, which, over time, escalated the ongoing trade war.
In February 2025, the US escalated matters further by announcing a new set of tariffs on steel and aluminium imports, prompting the European Commission to react decisively with its countermeasures.
Key Takeaways:
• EU has introduced countermeasures against unjustified US tariffs on steel and aluminium imports.
• US tariffs of 25% on steel and aluminium imports affect up to €26 billion worth of EU exports.
• The EU’s countermeasures are phased in, with the first step starting April 1, 2025, and the full scope in place by April 13, 2025.
• The EU aims to protect its businesses and consumers from price increases and supply chain disruptions caused by US tariffs.
• The European Commission is open to negotiations with the US to resolve the dispute diplomatically.
• The EU's countermeasures are designed to match the economic scale of the US tariffs and ensure fairness in trade.
• The EU has suspended previous countermeasures from 2018 and 2020, giving the US space for negotiations.
• The EU's response reflects the need to maintain strong and fair economic relations with the US, while protecting European industries.
• This trade dispute has its origins in 2018, under President Trump's administration, and has escalated over time.
• The EU is committed to defending its economic interests while fostering constructive dialogue with the US.
