The European Union has officially approved the first round of countermeasures against US tariffs on steel and aluminium. Starting 15 April, the EU will impose additional duties, mostly in the amount of 25%, on a number of US goods, the European Commission said,according to the NYT.
What happened?
On Wednesday, the European Commission announced the entry into force of a package of measures in response to discriminatory duties imposed by the United States. These duties were introduced by Washington during the presidency of Donald Trump, and they continue to be in effect, harming European exports.
The countermeasures were supported by 26 of the 27 EU countries – only Hungary voted against them. The first round of duties will start on 15 April, the second in May, and the third in December.
What exactly is subject to duty?
The new duties will affect a wide range of US goods, in particular:
- agricultural products: soya, rice, chicken, orange juice, fruit;
- industrial goods: wood, motorcycles, plastics, electronics, cosmetics.
Bourbon was excluded from the list to avoid further escalation: The US has threatened to increase duties by up to 200% on European wines and spirits.
Why now?
Trump’s new tariffs – 20% on all imports from the EU and 25% on European cars – came into effect this week. The European Commission has warned that the response to these measures will also be tough – and could be announced as early as next week.
The EU stresses that the US has an artificial trade imbalance because it ignores data on the US’s superiority in the services sector. Bilateral trade is worth €1.3 trillion, and the difference is only about €50 billion.
Political implications
The EU’s countermeasures specifically target products from states controlled by the Republican Party to increase pressure on Trump before the election. Meanwhile, Hungarian Foreign Minister Péter Szijjártó said that “escalation only harms citizens,” but his opinion remained in the minority.
European Commission President Ursula von der Leyen has renewed her proposal to conclude a comprehensive zero-for-zero trade agreement with the mutual elimination of all industrial duties. But the prospect of such a deal is unclear, given Donald Trump’s rhetoric and the growing isolationism of the United States.
