The European Union has announced the introduction of retaliatory tariffs on imports of goods from the United States totaling €26 billion. This measure is in response to the 25% tariffs imposed by the Donald Trump administration on imports of steel and aluminum. The new European tariffs will take effect in April 2025.
The European Commission expressed regret over the U.S. decision, calling it unjustified and harmful not only to European but also American businesses. Brussels emphasizes that such actions could lead to a significant increase in prices for key consumer goods.
Which goods are subject to tariffs?
According to the official list, the following categories of products from the U.S. will fall under the new tariffs:
- Alcohol – including whiskey, which is an important export product for the U.S.;
- Transport vehicles – motorcycles, boats, and other types of transportation;
- Metals – steel and aluminum, which are strategically important materials;
- Industrial goods – textiles, plastics, household appliances;
- Agricultural products – beef, poultry, eggs, dairy products, sugar, and vegetables.
The EU is also considering adding other categories of goods to the list after two weeks of consultations.
Why did the United Kingdom not support the EU initiative?
Interestingly, the United Kingdom, which has left the EU, does not plan to impose corresponding tariffs. A representative of the British government stated that London prefers negotiations and hopes to receive an exemption from American tariffs.
The official representative of Prime Minister Keir Starmer emphasized that the economic relations between the US and the UK are based on “fair and balanced mutual trade.” Additionally, during a recent visit to Washington, President Donald Trump confirmed readiness to negotiate a trade deal that would allow Britain to avoid new tariffs.
UK Trade Minister Jonathan Reynolds held telephone consultations with US Trade Minister Howard Lutnick, discussing the possibility of excluding Britain from the impact of new tariffs. A decision on this matter has not yet been made.
How will this impact the economy?
According to the industry organization UK Steel, British steel exports to the US are estimated at over £400 million (≈$518 million) annually. If American tariffs are indeed applied to British production, it could cause significant damage to the metallurgical industry of the UK.
Meanwhile, European companies are preparing for changes in trading with the US, as new tariffs could lead to price increases for many goods in the market. It is expected that the biggest consequences will be felt by steel, aluminum, and food production manufacturers, as well as distributors of alcoholic beverages.
Conclusions: Is there a threat to transatlantic trade?
Imposing new tariffs could be another twist in the trade war between the US and the EU, which will have a negative impact on the economies of both regions. Companies and consumers are likely to face rising prices on a range of goods, including metal products, alcohol, and agricultural goods.
The European Union insists on the need for dialogue and diplomatic solutions, but so far, the parties do not show readiness for compromise. Whether they will be able to avoid escalation of the trade conflict will be revealed in the near future.
