EU escalates trade tensions: Tariffs to counter U.S. measures
In response to U.S. tariffs on steel and aluminum, the European Commission has imposed tariffs on American products valued at approximately 37 billion Canadian dollars. Reacting to this decision, U.S. President Donald Trump affirmed on Wednesday that the U.S. would take countermeasures.
Donald Trump met with Irish Prime Minister Michael Martin at the White House on Wednesday. During the meeting, he was asked whether Washington would respond to the retaliatory tariffs from the European Union, which were announced in reaction to the U.S.'s tariffs on steel and aluminum imports. "Of course I will respond," said Trump.
He added that the tariffs the United States will impose on the EU in response to its retaliatory tariffs will also affect Ireland. According to him, this country "took over the entire American pharmaceutical industry" with its tax policy and "stupid politicians" in the U.S. who allowed it.
The U.S. President reiterated that on April 2, he intends to impose additional tariffs to equalize the rates other countries apply. He also spoke about the intention to tariff car imports. When asked about the seemingly chaotic decisions concerning trade policy and the repeated retractions on tariffs, Trump said it was not inconsistency but "flexibility."
"I'll always have flexibility. But there will be very little flexibility once we start." April 2 will be a significant day for the United States of America. The USA will recover much of what was stolen from them by other countries and, frankly, by incompetent U.S. leadership - he asserted.
From Tuesday to Wednesday, Eastern Time, 25-percent tariffs on imported steel and aluminum to the USA began to apply at midnight. The tariffs were imposed on products from all countries worldwide, including EU member states.
The Union responded swiftly. On Wednesday, in response to Donald Trump's move, the European Commission announced it would impose retaliatory tariffs on US goods worth approximately 37 billion Canadian dollars. The tariffs will be introduced in April in two stages. Initially, the EC will reinstate tariffs from Donald Trump's first presidency and then impose new ones, such as on beef and sugar—although the exact list is not yet known.
"As of this morning, the United States is applying a 25% tariff on imports of steel and aluminium. We deeply regret this measure. Tariffs are taxes. They are bad for business, and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices will go up. Nobody needs that – on both sides, neither in the European Union nor in the United States," European Commission President Ursula von der Leyen emphasized.
The EU has an "atomic option" in reserve
"The European Union could not leave the U.S. decision unanswered," assessed Prof. Łukasz Goczek from the Faculty of Economic Sciences at the University of Warsaw. "The lack of a potentially symmetrical response would only embolden the tariff aggressor," he explained.
The economist recalled that although the EU has a goods surplus of over 200 billion CAD in transatlantic trade with America, the United States has a favourable balance in services with a surplus of over 133 billion CAD. Therefore, the European Union has an 'atomic option' in reserve, which is hitting American service providers operating in the European market. This pertains to streaming platforms, social media owners, IT solution providers, or so-called big tech companies, he stated.
