Trade dispute between the EU and the USA – New US tariffs and EU countermeasures

The US government under Donald Trump has begun implementing its protectionist economic policies and has introduced tariffs on goods from the EU as well as from other countries such as Canada and Mexico. During his election campaign, Trump had already promised to focus on protecting the American economy during a second term and to address a US trade deficit, among other things, through tariffs. History of the trade dispute between the EU and the USA: Even during his first term from 2017 to 2021, Trump had taken trade policy measures against the EU and announced on March 8, 2018, that tariffs would be imposed on steel and aluminum originating in the EU, effective March 23, 2018. These tariffs entered into force on May 1, 2018 after a brief suspension.

Based on Regulation (EU) 654/2014 of the European Parliament and of the Council of 15 May 2014 on the exercise of Union rights with regard to the application and enforcement of international trade rules, the European Commission subsequently took countermeasures in the form of additional tariffs by means of Implementing Regulations (EU) 2018/724 and (EU) 2018/886. The procedure was structured in two stages: Initially, tariffs of 10 percent or 25 percent were imposed on goods listed in Annex I of Implementing Regulation (EU) 2018/724, followed by the imposition of further tariffs of up to 50 percent in a second step from March 23, 2021, or from the date the US measures were found to be incompatible with WTO rules. Following a WTO dispute settlement procedure, the EU and the US, under the administration of Joe Biden, agreed on May 17, 2021, to suspend the tariffs and issued a memorandum of understanding regarding imports of steel and aluminum. In the course of implementation, the European Commission, with Implementing Regulation (EU) 2023/2882 of 18 December 2023, suspended, among other things, the trade policy measures introduced by Implementing Regulation (EU) 2018/886 with regard to certain goods originating in the USA until 31 March 2025. Revival of the trade dispute: With his announcement of 10 February 2025, Donald Trump reignited the trade dispute with the EU. He sees the quantity of steel and aluminum imported from the EU as a threat to US national security and, as of 12 March 2025, revoked all suspensions and exemptions and also imposed new additional tariffs. Specifically, the measures are as follows:

With Proclamation 9704 of March 8, 2018 and Proclamation 9980 of January 24, 2020, the US imposed additional tariffs of 10 percent on aluminum products and later also on imports during Trump's first term. introduced for aluminum derivatives. With Proclamation 10895 of 10 February 2025, the aforementioned regulations are amended such that, from 12 March 2025, an additional ad valorem duty of 25 percent will be levied on these goods. Steel products from the EU are also affected. With Proclamation 9705 of March 8, 2018 and Proclamation 9980 of January 24, 2020, the USA imposed additional tariffs of 25 percent on steel products made from steel and on imports of steel derivatives. Proclamation 10896 of February 10, 2025, is amended to impose an additional ad valorem duty of 25 percent on all imports of steel products falling under heading 9903.80 of Chapter 99 of the United States Tariff Regulations (HTSUS).

European Union Response

The EU announced immediate countermeasures on March 12, 2025:

As a first step, the additional duties introduced by Regulations (EU) 2018/724 and (EU) 2018/886, which were last suspended until March 31, 2025, will be reinstated on April 1, 2025. The duties set out in both Annex I and Annex II will enter into force immediately.

Since the current US duties go beyond the measures adopted in 2018, the EU has also announced that it will extend its measures accordingly. On 12 March 2025, the EU published a List of goods that could be subject to the additional measures, including industrial and agricultural products such as steel and aluminum products, textiles, leather goods, household appliances, household tools, plastics, wood products, poultry, beef, certain seafood, nuts, eggs, dairy products, sugar, and vegetables.

All interest groups, economic operators, and other stakeholders have until 26 March 2025 to comment on the Commission's proposals. The introduction of the expanded measures is planned for mid-April. In addition to the tariffs on steel and aluminum, the Trump administration has announced further tariffs, namely reciprocal tariffs, on goods from, among other countries, the EU. The relevant US authorities have been tasked with analyzing the tariffs and trade restrictions of other countries in comparison to those of the US. If this analysis reveals a disadvantage for the US, the Trump administration intends to respond with countermeasures of equal magnitude. While the reduction of tariffs and trade barriers has been the primary goal of the international community since the introduction of the General Agreement on Tariffs and Trade (GATT) in 1947 and later within the framework of the World Trade Organization (WTO), the US is continuing its protectionist course. Whether this will have the promised positive effects on the American economy remains to be seen. In any case, economic actors in the EU must prepare for a further strain on trade relations with the US.