The European Union has announced its decision to impose tariffs on a wide array of US products starting from 1 April. This move comes as a countermeasure to the United States' recent policy to levy 25% tariffs on steel and aluminium from major trading partners, including the EU. With an extensive list nearly 100 pages long, the EU's tariffs will target €26 billion (£22 billion) worth of US exports. This marks a significant escalation in transatlantic trade tensions.
The EU's decision will affect numerous products ranging from food items such as meat, dairy, fruit, and peanut butter to consumer goods like jeans, motorbikes, and bourbon. Notably, the tariffs also extend to industrial and luxury items including toilet seats, wood, coats, swimwear, nightdresses, shoes, chandeliers, and lawnmowers. The EU officials have pointed out that certain products like soybeans and orange juice could easily be sourced from other countries like Brazil or Argentina, potentially minimizing the impact on European consumers.
This trade friction echoes past measures when the EU implemented similar tariffs in response to the Trump administration's actions in 2018 and 2020. The US Distilled Spirits Council expressed concern, highlighting the efforts of American distillers who have "worked hard to regain solid footing" in the EU market following the suspension of earlier tariffs. The proposed tariffs could significantly impact states under Republican control, with soybeans from Louisiana and meat from Nebraska and Kansas being particularly vulnerable.
In France's Charente region, cognac producers face potential devastation. The imposition of tariffs threatens thousands of jobs in the area, as cognac is predominantly an export product. Bastien Brusaferro emphasized this point stating, "Cognac is a product that's made for export." A 25% US import tax looms large over their industry.
The broader implications for the European steel industry are also dire. Henrik Adam, head of the European Steel Association, warned of severe consequences, describing President Trump's 'America First' policy as potentially "a final nail in the coffin of the European steel industry." Dirk Jandura remarked on the economic challenges stating, "Margins in trade are so low that this cannot be absorbed by the companies."
EU Council President António Costa has urged the United States to de-escalate the situation. He emphasized that this tit-for-tat measure could lead to an even more detrimental effect on both economies. Meanwhile, Olof Gill, an EU spokesman, highlighted the importance of a cohesive response saying, "It is essential that Europe acts together and decisively."
The new tariffs come at a time when businesses on both sides of the Atlantic are already grappling with economic uncertainties. Ursula von der Leyen noted the adverse effects of such policies: "Tariffs are taxes. They are bad for business, and worse for consumers." Dirk Beljaarts echoed these sentiments, stating that these measures will impact both companies and consumers—especially those in the US.