An hour after the US increased tariffs on steel and aluminium (see EUROPE 13577/1) came into force, the European Commission announced, on Wednesday 12 March, that it was taking countermeasures, which will come into force at the beginning of April.
The EU institution has firstly decided to reinstate the tariffs decided in 2018 and 2020, which had been suspended until 31 March. As these are well below the economic volume of the new US measures, it is expected to adopt a second wave of tariffs on additional products at the beginning of April.
“As the United States are applying tariffs worth $28 billion, we are responding with countermeasures worth $26 billion”, said the President of the European Commission, Ursula von der Leyen.
For the time being, however, the tariffs proposed by the Commission do not amount to exactly €26 billion, although the amounts may change at a later date.
The first tranche of tariffs, to be applied on 1 April, will affect €4.5 billion in US exports. These include products already targeted in 2018, such as bourbon whisky, motorbikes and jeans.
The second tranche, which will have to be approved by a qualified majority of Member States, amounts to €18 billion, at this stage. The list includes industrial products such as certain plastics, textiles and wood, as well as agri-food products (meat, dairy products, eggs, fruit, coffee, cane sugar and certain ready meals).
The two tranches add up to a total of around €22.5 billion in US exports.
The second list is subject to consultation with Member States and stakeholders over the next two weeks, after which the Commission will present its final proposal on Wednesday 26 March.
“We could respond with a ‘1 euro for 1 euro’ approach. But we think we have enough here to try to bring the United States to the negotiating table. And we do not rule out a different approach in the future”, explained a senior European official.
See the list of products proposed: https://aeur.eu/f/fvx
For the main representative of European employers, BusinessEurope, and for the American Chamber of Commerce to the EU (AmCham EU), the imposition of tariffs on both sides of the Atlantic is regrettable. These “will only harm jobs, prosperity and security on both sides of the Atlantic”, according to Malte Lohan, Chief Executive Officer of AmCham EU.
For their part, MEPs broadly support the Commission’s approach. “We must hope that the EU’s retaliatory measures will bring (Donald) Trump to the negotiating table”, said Jörgen Warborn (EPP, Swedish), his group’s coordinator on the Committee on International Trade.
The Commission can also count on the support of the Member States. “We must act as Europeans. First we need to fight back, establish a balance of power, and then open negotiations and routes”, French Minister for Industry, Marc Ferracci told Agence Europe on Wednesday 12 March.
However, Luxembourg’s Minister for Economic Affairs, Lex Delles, stressed the need to step up diplomacy to avoid this kind of tariff war. A few hours after the European Commission’s announcements, the United States responded through the US trade representative Jamieson Greer: “The EU’s punitive action completely disregards the national security imperatives of the United States - and indeed international security - and is yet another indicator that the EU’s trade and economic policies are out of step with reality”. (Original version in French by Léa Marchal)