The European Union has announced a package of trade countermeasures worth €26 billion (£22 billion) in response to Donald Trump’s tariffs on steel and aluminium imports.
The move, which comes as tensions escalate in an already fragile global trade environment, marks the latest chapter in a worsening economic dispute between Brussels and Washington.
The EU’s swift response follows the Trump administration’s decision to impose a 25% levy on steel and aluminium imports, a policy that came into effect at 4am GMT on Wednesday. European Commission President Ursula von der Leyen lambasted the move as an “unjustified trade restriction” and signalled that Brussels had no choice but to retaliate.
“We deeply regret this measure,” von der Leyen said in a statement, as she confirmed that countermeasures would come into force on 1st April. “The European Union must act to protect consumers and business.”
The EU’s retaliatory measures will target not only American steel and aluminium products but will also extend to textiles, leather goods, home appliances, plastic, wood, and household tools. Additionally, agricultural products, including poultry, beef, seafood, nuts, eggs, sugar, and vegetables, will be subjected to fresh levies.
Von der Leyen maintained that the EU remained open to dialogue, urging the US to reconsider its position. “We will always remain open to negotiation. We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs,” she added.
Despite the EU’s strong stance, the UK has opted not to introduce its own countermeasures. Prime Minister Keir Starmer confirmed that Britain would refrain from retaliatory tariffs, even after diplomatic efforts to secure exemptions from Trump’s sweeping measures failed.
A Downing Street spokesperson said: “We’ve been very clear that when it comes to the UK steel industry we remain prepared to defend the UK’s national interest where it’s right to do so. But we will continue to take a cool-headed approach.”
This decision leaves British manufacturers exposed to the full impact of the US tariffs without the protective buffer of retaliatory action, raising concerns among UK businesses already grappling with a challenging economic climate.
The steel industry has issued stark warnings about the potential damage these tariffs could cause, with experts branding the timing of the levies as particularly harmful. Gareth Stace, Director General of UK Steel, condemned Trump’s move as “hugely disappointing” and warned of its severe repercussions for British producers.
“These tariffs couldn’t come at a worse time for the UK steel industry, as we battle with high energy costs and subdued demand at home, against an oversupplied and increasingly protectionist global landscape,” Stace said. He also expressed concern that retaliatory measures from the EU would amplify the strain on UK firms, potentially leading to reduced exports and job losses in the sector.
The aluminium industry is also feeling the heat. Nadine Bloxsome, Chief Executive of the Aluminium Federation, highlighted the unintended consequences of the US tariffs, which are already causing disruptions in trade flows.
“The sharp rise in US premiums has created new incentives for scrap exports, raising the risk of significant domestic scrap leakage. This not only weakens the UK’s recycling capacity but risks undermining our sustainability objectives and circular economy targets,” Bloxsome said.
Adding to the mounting concerns, she warned that trade diversion could flood the UK market with cheaper, semi-finished aluminium products from other countries, undercutting domestic producers who are already burdened with high energy costs and complex regulations.
The potential for further escalation remains high. While both sides have left the door open for negotiation, the widening gulf between Washington and Brussels suggests that any resolution may be some way off.
With industries on both sides of the Atlantic already feeling the strain, the coming months will prove critical in determining whether this trade dispute can be de-escalated or if it will spiral into a full-scale trade war with far-reaching consequences.
Main Image: Photographer: Denis LOMME © European Union 2023 – Source : EP
