Bloomberg
The European Union is broadening the list of US goods it will target with retaliatory tariffs if US President Donald Trump follows through on his threat to impose duties on steel and aluminum exports, according to people familiar with the matter.
Bloomberg reported on Saturday that the US measures could impact as much as €28 billion ($29.3 billion) of European exports if derivative products are hit, which would be about four times larger than the last time Trump went after the bloc’s metals sector.
As part of his effort to rewrite global trade rules, Trump announced a series of duties including 25% tariffs on steel and aluminum exports that could take effect as soon as March 12. He’s also announced reciprocal tariffs based on the policies of partners that are seen as obstacles to US trade.
The list of US goods targeted by the EU in response to Trump’s original measures is currently suspended until the end of March, but will automatically snap back if no action is taken. Adjusting that list will depend on the exact impact of Trump’s new measures and that is not yet known, said the people, who spoke on condition of anonymity.
In expanding the lists of US targets, the EU is assessing the impact on the US, the bloc’s alternative sources of supply an,d the effect the levies will have across member states, according to the people. Any potential response would neealso need to proportionate to the US measures and compliant with World Trade Organization rules.
The EU trade chief, Maros Sefcovic, debriefed the bloc’s ambassadors last Friday after his visit to Washington to meet with his US counterparts. The people said he cautioned that the situation is in flux and that the details and scope of any tariffs could still change.
Sefcovic — who met with US Commerce Secretary Howard Lutnick, Jamieson Greer, Trump’s pick for US trade representative and National Economic Council Director Kevin Hassett last week — told EU envoys that the atmosphere was positive but no negotiations were conducted and the EU doesn’t have full clarity on Trump’s intentions yet, the people said.
To avoid a trade clash, Sefcovic offered to his American counterparts a deal to lower tariffs on industrial goods, including cars, one of Trump’s longstanding demands, according to the people.
The people said any move to lower tariffs on cars would need to be part of a broader mini-trade deal that covers other sectors to comply with WTO rules, which would otherwise require the bloc to provide equal treatment to other nations. Separately, the US is seeking long-term liquefied natural gas contracts. Trump has also set his sights on Europe’s digital taxes and value-added tax.
For the EU, the fight over American metals tariffs started in 2018 during Trump’s first term, when the US hit nearly $7 billion of European steel and aluminum exports with duties, citing national security concerns. At the time, officials in Brussels scoffed at the notion that the EU posed such a threat.
In that first salvo, the US hit steel goods with 25% tariffs and aluminum with 10%, and included exemptions for certain products. Bloomberg reported earlier that this time around, no exemptions were planned.
The 27-nation bloc reacted by targeting politically sensitive companies with retaliatory duties, including Harley-Davidson Inc. motorcycles and Levi Strauss & Co. jeans. The measures were applied product-by-product and included agricultural goods and apparel in addition to steel and aluminum products.
The two sides agreed to a temporary truce in 2021 with Joe Biden’s administration when the US partly removed its measures and introduced a set of tariff-rate quotas above which duties on the metals are applied, while the EU froze all of its restrictive measures.
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