EU adopts tariffs on $31b of US goods in metals dispute

BRUSSELS - The European Union approved tariffs to hit around €21 billion (S$31.27 billion) worth of US goods in retaliation for the 25 per cent duties President Donald Trump imposed in March on the bloc’s

steel and aluminium exports.

A majority of the EU’s 27 member states on April 9 voted in favour of the penalties, some of which will start to take effect in mid-April.

The tariffs will target politically sensitive American states and include products such as soya beans from Louisiana, home to House Speaker Mike Johnson, as well as diamonds, agricultural products, poultry and motorcycles.  

The move adds to the growing transatlantic trade war, with the US also having applied a universal

20 per cent tariff on nearly all European exports

as well as a separate 25 per cent duty on cars and some auto parts.

Mr Trump has said he will announce additional tariffs on lumber, semiconductor chips and pharmaceutical products. All of his new tariffs are hitting around €380 billion worth of EU goods.  

Some of the EU tariffs will take effect in mid-April, while another list will be imposed in mid-May and a third will start on Dec 1, Bloomberg reported earlier.

Most of the targeted goods face a 25 per cent tariff level, with a few categories set to face a rate of 10 per cent. 

Bourbon was removed from the bloc’s list amid pressure from member states after Mr Trump threatened 200 per cent duties on wine, champagne and other alcoholic beverages from France and elsewhere. 

Mr Trump has repeatedly attacked the EU, the US’ largest trading partner, saying it was formed to “screw” the US and that the bloc’s trade-in-goods surplus is evidence of an unfair relationship.

The EU’s trade-weighted average tariff rate was 2.7 per cent in 2023, according to World Trade Organisation data. 

“They come up with rules and regulations that are just designed for one reason: that you can’t sell your product in those countries,” Mr Trump said earlier this week. “And we’re not going to let that happen.”

The EU’s trade chief, Mr Maros Sefcovic, discussed parameters of possible engagement on trade issues with his American counterparts late on April 8, according to a European Commission spokesperson.

Talks have so far yielded little progress and US officials do not appear to yet have a clear negotiating mandate from Mr Trump, according to people familiar with the discussions.

The bloc’s executive arm is working on a “term sheet” of potential areas for negotiation, including lower tariffs, regulations and standards, Bloomberg previously reported.

The April 9 vote underscored the unity in EU capitals in the face of Mr Trump’s escalating trade dispute. The American measures threaten to wipe out much of the euro-area expansion the European Central Bank forecasts for 2025 and 2026.

In addition, the commission, which handles trade matters for the bloc, is preparing a set of countermeasures to retaliate against the so-called reciprocal tariffs that

went into effect on April 9.

The commission is planning to announce its plans early next week and then begin consultations with member states, a spokesperson said. 

The universal tariffs are meant to target all the trade barriers US exports face abroad, such as duties, domestic regulations and taxes, including the value-added tax. Commission President Ursula Von der Leyen has previously said the EU “holds a lot of cards”, including retaliatory tariffs and targeting American services and technology companies.

France, Germany and other countries have called on the commission to consider deploying the bloc’s anti-coercion instrument – the EU’s most powerful trade tool, designed to strike back against nations that use trade and economic measures coercively, Bloomberg reported earlier. 

The bloc still wants to find a negotiated solution to the tariff dispute but so far it has failed to engage in meaningful negotiations with the US administration. 

For the EU, the fight over American metals tariffs started in 2018 during Mr Trump’s first term, when the US hit nearly US$7 billion (S$9.42 billion) of European steel and aluminium exports with duties, citing national security concerns. At the time, officials in Brussels scoffed at the notion that the EU posed such a threat.

In that first salvo, the US hit steel goods with 25 per cent tariffs and aluminium with 10 per cent, and included exemptions for certain products. 

The 27-nation bloc reacted by targeting politically sensitive companies with retaliatory duties, including Harley-Davidson motorcycles and Levi Strauss jeans.

The measures were applied product-by-product and included agricultural goods and apparel in addition to steel and aluminium products. 

The two sides agreed to a temporary truce in 2021, when the US partly removed its measures and introduced a set of tariff-rate quotas above which duties on the metals are applied, while the EU froze all of its restrictive measures. BLOOMBERG