European Union chief Ursula von der Leyen has declared that the U.S. tariffs on steel and aluminum “will not go unanswered,” promising tough countermeasures from the 27-nation bloc. In a statement responding to the tariff impositions by U.S. President Donald Trump, von der Leyen said, “The EU will act to safeguard its economic interests.” She criticized the tariffs as “taxes — bad for business, worse for consumers,” and warned that “unjustified tariffs on the EU will trigger firm and proportionate countermeasures.”
In Germany, Chancellor Olaf Scholz addressed the German parliament, emphasizing a united EU response. “If the U.S. leaves us no other choice, then the European Union will react united,” Scholz stated, highlighting that trade wars diminish prosperity on both sides.
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The tariffs, set at 25% for steel and aluminum, aim to protect U.S. manufacturers from global competition, potentially allowing them to increase prices. This move echoes similar actions taken during Trump’s first term, which strained relations with allies and increased costs for U.S. manufacturers using these materials.
The exact nature of the EU’s countermeasures remains undisclosed, but there are suggestions they might focus on products from states that typically support the Republican party or key U.S. exports. Historically, after the 2018 steel tariffs, the EU retaliated with tariffs on items like U.S. motorcycles, bourbon, peanut butter, and jeans.
EU Commission Vice-President Maroš Šefčovič criticized the tariffs as “economically counterproductive,” given the intertwined trade and investment relations between the EU and the U.S. He emphasized the EU’s commitment to protect its interests but also its preference for dialogue and negotiation to find mutually beneficial solutions.
The trade relationship between the EU and the U.S. is substantial, with an estimated trade volume of about $1.5 trillion, which constitutes around 30% of global trade. In 2023, EU goods trade with the U.S. amounted to 851 billion euros ($878 billion), with a surplus for the EU of 156 billion euros ($161 billion). However, this is somewhat offset by a deficit in services trade, where the U.S. holds a surplus.
Chancellor Scholz also expressed hope for avoiding escalation, stating, “I hope that we are spared the misguided path of tariffs and counter-tariffs,” underscoring the EU’s stance as the world’s largest market acting collectively in response to these challenges.
Key Points:
EU Response to U.S. Tariffs: EU chief Ursula von der Leyen has vowed that U.S. tariffs on steel and aluminum will face retaliation, promising “firm and proportionate countermeasures.”
Economic Impact: Von der Leyen described tariffs as taxes harmful to business and consumers, highlighting the EU’s intent to safeguard its economic interests.
German Support: German Chancellor Olaf Scholz emphasized a united EU front, stating that trade wars reduce prosperity for both sides.
Tariff Details: U.S. President Donald Trump has imposed a 25% tariff on foreign steel and aluminum to protect domestic producers, similar to actions during his first term.
Potential EU Countermeasures: While specifics are unclear, previous retaliations have targeted U.S. goods like motorcycles, bourbon, and jeans, with potential focus on Republican states.
Economic Relations: EU Commission Vice-President Maroš Šefčovič labeled the tariffs as counterproductive, noting the deep integration of transatlantic trade.
Trade Volume: The EU-U.S. trade relationship is significant, with an annual trade volume of about $1.5 trillion, representing 30% of global trade.
Trade Balances: In 2023, EU goods trade with the U.S. showed a surplus for the EU, while the U.S. had a surplus in services trade.
Hope for Dialogue: Despite the threats of retaliation, there remains an EU preference for negotiation and constructive dialogue to resolve the issue.
