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Brussels (dpa) – U.S. President Donald Trump has introduced new import tariffs on steel and aluminum products despite warnings from the EU. The response from Brussels is prompt. Is this now the beginning of the feared trade war between Europe and the United States?
What exactly happened on Wednesday morning?
At 5:01 a.m. Central European Time, Trump enacted new tariffs of 25 percent on the import of steel and aluminum products to the U.S. Already about an hour later, the EU announced countermeasures. Starting April 1, additional EU tariffs on the import of American products such as bourbon whiskey, video game consoles, boats, and peanut butter will be due again. The tariff rate is expected to be up to 50 percent – for example, for motorcycles produced in the USA by well-known manufacturer Harley-Davidson.
The plans of the European Commission responsible for EU trade policy also foresee imposing numerous other import duties in coordination with the member states starting in mid-April. They aim to target companies selling American agricultural products like poultry, beef, certain seafood, nuts, eggs, dairy products, sugar, and vegetables in the EU. In addition, there will be more EU tariffs on other industrial products such as textiles, leather goods, household appliances, tools, plastics, and wood products. The tariff rate could be 25 percent.
What does the tariff dispute mean for the economy and jobs?
EU Commission President Ursula von der Leyen sees significant dangers. Specifically, she predicts rising prices, supply chain problems, and the risk of job losses. «Tariffs are taxes. They are bad for businesses and even worse for consumers,» she says.
Economists share this view. The resulting uncertainty negatively impacts corporate investments and the economy in general, analyzes Samina Sultan from the Institute of the German Economy (IW). «That could also endanger jobs on both sides of the Atlantic.»
Which products could become more expensive?
Basically, all that are affected by tariffs. «How much more expensive depends, for example, on how high the demand is or whether the products can be easily replaced with equivalent products from Europe,» explains economist Sultan. In the case of jeans, the German Fashion Association considers the effects to be manageable, for instance. Products that come directly from the USA do not play a significant role in the market here, says a spokesperson. The most important manufacturing countries are China, Bangladesh, and Turkey.
Is this now the beginning of a large European-American trade war?
That probably depends mainly on Donald Trump. Thomas Gitzel, chief economist at VP Bank in Liechtenstein, sees the danger of an escalation spiral. Unlike the trade conflict between the EU and the U.S. during Trump’s first term, U.S. punitive measures could just be the start of a whole series of tariffs. «A global trade war is therefore slowly gaining momentum,» he says. Trump has already announced his intention to impose new tariffs on cars and other goods from the EU.
As a result of increased U.S. tariffs against China, goods from the Far East could also start flowing into Europe more heavily, says Rolf Langhammer, an economist at the Kiel Institute for the World Economy (IfW). «There is a fear of a negative-sum game where everyone loses.»
What’s next?
Commission President von der Leyen emphasizes that the EU is ready to negotiate. «We are firmly convinced that in a world full of geoeconomic and political uncertainties, it is not in our mutual interest to burden our economies with such tariffs,» she says.
What could the EU offer Trump?
According to the EU Commission, the European Union and Trump could, for instance, close a new deal to expand American exports of liquefied natural gas (LNG). It would also be possible to import more military technology and agricultural goods from the U.S. and lower import duties on U.S. cars. These were recently significantly higher, at ten percent, than the U.S. tariff rate of 2.5 percent.
What are the EU’s leverage points?
The EU’s extra tariffs could hit some U.S. companies hard. Trump already imposed special tariffs on the import of steel and aluminum products during his first term from 2017 to 2021 and justified this «with national security interests.» The EU had already reacted at that time with retaliatory tariffs on U.S. products like bourbon whiskey and motorcycles, and manufacturers like Harley-Davidson complained about negative effects.
They are trying to hit the U.S. where it hurts, an EU official said on Wednesday in Brussels. This means that they have a list of products with high iconic and symbolic value. To build as much political pressure as possible, they are also targeting products from the home states of influential Trump party friends. New EU tariffs on soybeans, for example, have been discussed, which are produced in, among other places, Louisiana, the home of House of Representatives Speaker Mike Johnson.
Why is Trump introducing tariffs at all?
Trump wants to boost the U.S. as a manufacturing location and reduce trade deficits. It bothers him, for example, that European companies sell significantly more goods in the U.S. than American companies do in the EU. This mainly concerns Germany: in 2024, German exporters sold goods worth 161.4 billion euros in the USA, about ten percent of all German exports. Conversely, in 2024, goods worth 91.4 billion were imported from the USA. The result was a German record trade surplus of around 70 billion euros with the USA.
The EU Commission argues that the U.S. sells more services to the EU than vice versa. Taking into account both goods and services, there was only a small surplus of 48 billion euros in 2023. This corresponds to three percent of the total trade between the U.S. and the EU. (March 12)