EU retaliates after Donald Trump’s steel and aluminium tariffs take effect

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The EU has retaliated against Donald Trump’s 25 per cent tariffs on steel and aluminium within hours of them taking effect, escalating a global trade war.

The European Commission said its measures would affect up to €26bn of American goods, matching the US tariffs on European exports, and would take effect in April, leaving some time to negotiate with Washington.

“The European Union must act to protect consumers and business,” said commission president Ursula von der Leyen.

Brussels acted after Trump’s tariffs on steel and aluminium imports into the US took effect on Wednesday, as the US president continued to pursue his protectionist trade agenda despite growing concern over the risk of a domestic recession.

Brussels has reinstated measures introduced during the first Trump term, including tariffs on iconic American products such as bourbon whiskey, jeans and Harley-Davidson motorcycles. These would take effect on April 1.

Further measures include targeting industrial goods and agricultural produce such as poultry and beef. These still have to be approved by EU countries and would come into force in mid-April.

Trump announced last month that he would impose the duties, ripping up agreements struck between his predecessor Joe Biden and US trading partners to allow certain quantities of steel and aluminium to enter the country duty free.

US officials under Trump have framed the move as a response to “foreign players” that they say are responsible for “surging exports” of metals to America that are undermining domestic producers.

Trump has also expanded the metals tariffs to apply to a wide range of products containing steel and aluminium, including tennis rackets, exercise bikes, furniture and air conditioning units.

The move is part of a broader package of protectionist measures introduced by Trump since he took office in January.

Australian Prime Minister Anthony Albanese on Wednesday said the tariffs were “entirely unjustified” and “against the spirit” of the nations’ “enduring friendship”.

Australia was exempt from similar tariffs implemented during Trump’s first term, and the country’s steel producers supply the US defence and manufacturing sectors.

“This is not a friendly act,” said Albanese.

The full list of steel and aluminium products subject to the levies represented $151bn of imported goods in 2024, according to an analysis by Simon Evenett and Johannes Fritz of the St Gallen Endowment for Prosperity Through Trade.

Ted Murphy, a partner at law firm Sidley Austin, said Trump’s sweeping new metals tariffs represented a “big change” from his approach when he introduced similar levies in 2018 and allowed exclusions for some products. 

“The product exclusions were vetted through a US government process to confirm the products weren’t available in the US,” said Austin. “So taking that away will mean a lot of folks will have to pay the tariff because they can’t source these products domestically.”

On Tuesday, Trump announced he would double the tariffs applied to steel and aluminium imports from Canada to 50 per cent, marking an escalation in his trade war with one of the US’s top three trading partners, before reversing course later in the day.

The Canadian province of Ontario, which had on Monday announced a 25 per cent surcharge on power exported to the US, on Tuesday said it would suspend the charge in a bid to de-escalate the tit-for-tat tariffs.

Additional reporting by Nic Fildes in Sydney and Andy Bounds in Brussels