EU Estimates $29.3 Billion Impact from Trump’s Steel and Aluminum Tariffs
As part of his broader strategy to overhaul global trade, Donald Trump introduced a series of tariffs, including a 25% duty on steel and aluminum exports, which could take effect by March 12.
- European Union’s Estimate: The EU estimates that the first round of tariffs will impact up to €28 billion ($29.3 billion) in exports.
- Potential Escalation: This would represent a significant escalation compared to previous tariffs imposed on the EU’s metals sector.
- Larger Scope: The new tariffs are expected to encompass derivative products as well, amplifying their impact.
EU Response and Situation Status
Maros Sefcovic, the EU’s trade chief, briefed the bloc’s ambassadors after his visit to Washington. He noted that the situation is fluid, and the details of the tariffs may still evolve.
- Potential for Change: The final scope and details of the tariffs are uncertain, with changes still possible.
- Trump’s Trade Effort: These duties are part of Trump’s ongoing effort to reshape global trade policies, particularly targeting steel and aluminum exports.
- Reciprocal Tariffs: Trump also indicated that reciprocal tariffs could be implemented in response to trade policies that are perceived as hindrances to US trade.
The European Commission has yet to comment on the matter publicly.
History of EU-US Tariff Disputes
The EU’s trade conflict with the US over metal tariffs dates back to 2018, when Trump’s administration imposed tariffs on nearly $7 billion of European steel and aluminum exports, citing national security concerns.
- Initial Tariffs: The US placed a 25% tariff on steel and 10% on aluminum, with certain product exemptions.
- EU Retaliation: In response, the EU imposed retaliatory duties on politically sensitive US goods, including Harley-Davidson motorcycles and Levi’s jeans, as well as agricultural and apparel products.
A temporary truce was reached in 2021, where the US relaxed some of its tariffs and introduced tariff-rate quotas for metals, while the EU suspended its retaliatory measures.
EU’s Potential Reaction to New Tariffs
The EU has pledged to respond swiftly and proportionately to any new tariffs. If the tariffs resume, the EU might re-implement the measures it previously suspended.
- Prepared for Retaliation: The European Commission is already compiling target lists of sectors and goods for retaliatory duties, aimed at maximizing economic pressure on the US.
- Suspended Measures: Current tariffs are on hold until March 31, but they could be quickly reinstated if necessary.
Sefcovic’s Efforts to Avoid Further Conflict
Sefcovic met with US trade officials, including Commerce Secretary Howard Lutnick and National Economic Council Director Kevin Hassett, discussing potential avenues for reducing tensions.
- Opening Dialogue: While no formal negotiations were conducted, Sefcovic emphasized the need to open communication channels and address misleading claims from the US, such as allegations regarding Europe’s value-added tax.
- Potential Deal: To avert a trade clash, Sefcovic offered the US a proposal to lower tariffs on industrial goods, including cars, one of Trump’s longstanding demands.
These ongoing tensions highlight the complexities and challenges in US-EU trade relations.