The European Union is preparing for the impact of the first round of U.S. tariffs that are set to take effect on Wednesday. These new tariffs will impose a 25% duty on both aluminium and steel imports, potentially affecting EU imports valuing more than what was impacted under the tariffs imposed by U.S. President Donald Trump in 2018. One significant challenge the EU faces is that these new tariffs represent a larger impact than in 2018, when Trump’s tariffs affected approximately 6.4 billion euros ($6.9 billion) of EU metal shipments.
The U.S. plans to not only reinstate the tariffs but also increase the aluminium duty from 10% to 25%. The tariffs will also extend to ‘derivative products’, which cover a wide range of goods including machinery parts and consumer items like car bumpers and sports equipment. According to the Swiss monitoring service Global Trade Alert, the EU’s exports of these additional products are valued at roughly $20.3 billion, complicating the situation further alongside the direct impact on metal exports worth about 8 billion euros ($8.7 billion).
In response to the 2018 tariffs, the EU implemented its own duties on 2.8 billion euros worth of U.S. imports. Although further tariffs on an additional 3.6 billion euros of imports were initially planned, these were postponed when President Joe Biden and EU leaders agreed to a truce. However, these countermeasures are poised to take effect on April 1, leading the European Commission to contemplate whether to accelerate these responses and identify more U.S. products to target.
Any proposed measures would be enacted unless opposed by a “qualified majority” of EU member states. Negotiations appear stalled, as European Trade Commissioner Maros Sefcovic stated that the U.S. does not seem open to discussions to mitigate the tariffs. The EU remains committed to taking necessary actions to protect its businesses, workers, and consumers amidst ongoing uncertainty about the specifics of the measures and the classification of derivative products.
The Commission has expressed readiness to engage in discussions with U.S. counterparts to address trade grievances.