The European Union is to hit back against “unjustified” tariffs the United States has introduced on all steel and aluminium imports, ratcheting up a dispute many fear will escalate into a full blown trade war.
A decision by US president Donald Trump to levy tariffs of 25 per cent on imports of steel and aluminium products took effect on Wednesday, drawing retaliatory measures from Europe.
The European Commission, the EU’s executive arm responsible for trade policy, announced it would respond with its own tariffs on up to €26 billion worth of US goods in the coming weeks.
The counter measures will be targeted at trade and goods coming from Republican heartlands in the US, in an effort to put political pressure on Mr Trump to reconsider his tariff policy.
US tariffs will curb exports and slow growth, ESRI warns
Donald Trump says Irish pharma sector among next targets as he announces 25% tariffs on car imports
Top EU official expects Trump tariff of about 20%
Europe must avoid not just tariff row but ‘verbal escalation’ with US, Italian minister tells Dublin conference
Bourbon whiskey, motor boats and Harley Davidson motorbikes will be among the first products subject to increased import taxes, from April 1st.
EU commission officials are preparing a much wider list of US products that would be subject to tariffs of up to 25 per cent. Possible goods that may be in the firing line include agricultural exports, soybeans, consumer products like handbags and other clothes, cosmetics and tobacco products.
[ US-Ireland trade deficit: what is it and what might Donald Trump do about it?Opens in new window ]
Those tariffs on a broader range of goods sold from the US will come into effect from the middle of next month, following a short consultation period with EU capitals and industry.
The commission hopes a deal can be agreed that would see both the US and EU walk back the respective trade measures.
Mr Trump has described tariffs, which are effectively taxes on imported goods, as a way to readjust imbalances in global trading relationships he feels are unfair. He has singled out the EU in particular as a bloc he believes is taking advantage of the US economically.
The Republican president has asked US officials to draw up proposals for much more sweeping tariffs, beyond those already announced on steel and aluminium.
In a statement, commission president Ursula von der Leyen said she deeply regretted the decision by the US to push ahead with tariffs on steel and aluminium. “They are bad for business, and worse for consumers.
Commission officials are also looking at further ways to increase the pressure on the US to reconsider its approach. “We’re not taking any options off the table,” one EU official involved in the work said.
