European Union to Implement Firm Response to Unjustified U.S. Tariffs
The European Commission has announced its intent to respond decisively to U.S. President Donald Trump’s recent imposition of tariffs on steel and aluminum imports. The Commission criticized Trump’s proposed “reciprocal” trade policy, labeling it as counterproductive and a hindrance to free and fair trade. It emphasized that tariffs are essentially taxes that harm citizens, increase business costs, stifle growth, and fuel inflation, while disrupting global market efficiency and integration. Reiterating its commitment to protecting European businesses, workers, and consumers, the Commission asserted that the EU maintains some of the lowest tariffs globally and sees no justification for elevated U.S. tariffs on its exports. This move follows earlier similar tariffs imposed by Trump, which had led the EU to retaliate by raising tariffs on various U.S. products. The trade volume between the EU and U.S. is estimated at $1.5 trillion annually, with the bloc having a substantial goods export surplus, partially offset by a U.S. surplus in service trade.
The European Commission, which negotiates trade relations on behalf of the 27-nation bloc, stated that the EU has some of the lowest tariffs in the world and sees no justification for increased U.S. tariffs on its exports. “Tariffs are taxes. By imposing tariffs, the US is taxing its own citizens, raising costs for business, stifling growth and fuelling inflation,” it said. “Tariffs heighten economic uncertainty and disrupt the efficiency and integration of global markets.”
The Commission highlighted the discrepancy between EU tariffs on car imports (10%) compared to the U.S. (2.5%), among other trade imbalances. Despite European Commission President Ursula von der Leyen’s vow to impose proportionate countermeasures, EU trade ministers urged negotiation first, as U.S. tariffs on steel and aluminium were not set to start until March 12. Trump’s directive initiated an investigation into U.S. tariffs imposed by other countries, allowing time for both negotiation and reaction by the EU.
The EU estimates that annual trade volume between both sides stands at about US$1.5 trillion, representing some 30 per cent of global trade. While the bloc has a substantial export surplus in goods, it says that is partly offset by the U.S. surplus in the trade of services. The EU says that trade in goods reached 851 billion euros ($878 billion) in 2023, with a trade surplus of 156 billion euros ($161 billion) for the EU. Trade in services was worth 688 billion euros ($710 billion) with a trade deficit of 104 billion euros ($107 billion) for the EU.