The EU’s counter tariffs on American exports
The new US tariffs on aluminium and steel have been causing issues around the world, and the EU is no exception. Despite months of disputes, President Trump introduced the duties earlier in the month. The European Union, like other major trade partners of the US, recently announced its plans to impose counter tariffs against American goods. And now, according to top officials, it looks like these tariffs are due to take effect in the near future.
European trade commissioner, Cecilia Malstrom, confirmed in a recent interview that although the bloc “did not want to be in this position”, that “The unilateral and unjustified decision of the US to impose steel and aluminium tariffs on the EU means that we are left with no other choice.”
Malstrom claims that the EU response is in line with WTO rules, and the measures are proportionate. She added that the counter measures would be removed if the US agrees to remove its tariffs on metal products. It’s believed at this stage that it would affect a number of American goods including jeans, motorbikes and bourbon whiskey.
This list was initially drawn up in March, when the president announced the 25% tariff on steel imports and 10% on aluminium. These tariffs apply to a number other close US allies as well, including their neighbours Mexico and Canada. He has also recently threatened to impose additional tariffs of around £200 billion on Chinese products, and that they would come into effect if China “refuses to change its practices”.
Many of the products that are in line for counter tariffs have been chosen specifically to create the most effect politically. For example, Bourbon whiskey is produced in Kentucky and orange juice is a key export in the state of Florida: both of these states are considered “swing states” in US elections.
Economics have already warned that the effects of a future trade war could be disastrous for both sides, and for the rest of the global economy. They will end up leading to higher metal costs and disrupt supply chains, and there’s a real possibility these costs could be passed onto US households. In addition, The International Monetary Fund has warned that the policies are likely to harm the US economy going forward.