EU strikes back with $28B tariffs on US goods as trade war escalates

The European Commission announced on Wednesday that it will implement counter tariffs on a substantial range of US goods, valued at 26 billion euros (equivalent to $28 billion), starting from next month, according to a Reuters report.

This move marks a significant escalation in the ongoing global trade war, triggered by the US imposition of sweeping tariffs on steel and aluminium imports. 

The EU's decision to retaliate with its own set of tariffs highlights the deepening tensions between the two major trading partners and raises concerns about the potential for further disruptions to global trade flows. 

The counter tariffs are expected to affect a wide array of US products, potentially impacting industries and businesses on both sides of the Atlantic.

However, the EU executive stated that it was still open to discussions and believed that raising tariffs was in no one's best interest.

US tariffs

US President Donald Trump's increased tariffs of 25% on all steel and 10% on all aluminum imports went into effect on Wednesday. 

These tariffs, which had been announced earlier, were initially applied to most countries but with temporary exemptions for certain nations and specific product exclusions. 

As of Wednesday, those exemptions, along with any duty-free quotas that had been in place, expired. 

This means that all steel and aluminum imports, regardless of their origin or type, are now subject to the full tariffs.

The move was controversial, with some arguing that it would protect American jobs and boost domestic manufacturing, while others contended that it would raise prices for consumers and harm industries that rely on imported metals.

EU tariffs 

The European Commission announced that the suspension of tariffs on US products will end on April 1. Tariffs will be fully reinstated by April 13.

"The counter measures we take today are strong but proportionate. As the United States are applying tariffs worth $28 billion we are responding with counter measures worth 26 billion euros," European Commission chief Ursula von der Leyen was quoted in the report.

The EU stated that it would initiate a two-week consultation to select additional product categories, and that the suspended tariffs are applicable to a variety of products, including boats, bourbon, and motorbikes.

The EU further stated that the new measures aim to ensure that the total value of those measures matches the increased value of trade affected by the new US tariffs. 

These measures will target approximately 18 billion euros worth of goods.

Open for negotiations

"In the meantime we will always remain open to negotiations," von der Leyen said.

The proposed target products encompass a wide range of both industrial and agricultural commodities. 

Within the industrial sector, this includes essential materials like steel and aluminium, as well as finished goods such as textiles and home appliances. 

The agricultural sector is also broadly represented, with target products ranging from livestock and poultry products like beef, eggs, and dairy, to cultivated goods such as sugar and a variety of vegetables. 

Additionally, the inclusion of plastics suggests a focus on petrochemical derivatives and their applications in various industries.