US President Donald Trump has imposed new tariffs of 25% on imports of steel and aluminium products from Europe into the US. The new tariffs came into force at 6.01 am Bulgarian time on Wednesday (March 12).
How did the EU react?
About an hour later, the EU announced countermeasures: From April 1, additional EU tariffs will again apply to imports of US products such as whisky, video game consoles, boats and peanut butter. In some cases, the tariff rate will be 50% - for example, for motorcycles such as those from the famous manufacturer "Harley Davidson".
The European Commission plans to introduce counter-tariffs from mid-April on a number of other imported goods - after consultations with member states. These duties should affect companies that sell American agricultural products in the EU - poultry or beef, some seafood, nuts, eggs, dairy products, sugar and vegetables. It is planned to introduce additional EU tariffs on other industrial products such as textiles, leather and wood products, plastics, household appliances and tools. The tariff rate could reach 25%.
What does the dispute over tariffs mean for the economy and jobs?
European Commission President Ursula von der Leyen sees significant risks. Specifically, she predicts price increases, problems in supply chains and the risk of job losses. "Tariffs are taxes. They are bad for businesses and even worse for consumers," she said. Her view is shared by some economists.
However, the Kiel Institute for the World Economy (IfW) believes that Trump's specific tariffs will have little impact on the European economy. Steel and aluminum products account for only about 5% of all EU exports, and only a small part of them goes to the United States. According to the IfW, this would mean a reduction of only 0.02 percent in the European Union's gross domestic product (GDP).
Which products could become more expensive?
Basically, all those affected by the tariffs. "How much they will increase in price depends, for example, on how much demand there is for them or whether the products can be easily replaced with equivalent products from Europe," explains Zamina Sultan from the Institute for German Economics (IW), quoted by ARD.
Take jeans, for example: The German Fashion Association believes that the impact will be limited, since products that come directly from the US do not play a significant role in the German market. According to the Federal Statistical Office, in 2024, jeans worth just over three million euros were imported into Germany from the US, which corresponds to just 0.1% of all imports. For this item, imports from China, Bangladesh and Turkey are more important for the German market.
Is this the start of a major trade war?
Unlike the trade conflict between the EU and the US during Trump's first term, the US punitive measures could now be just a prelude. "The global trade war is slowly gaining momentum," says Thomas Gitzel, chief economist at VP Bank in Liechtenstein. Trump has already announced his intention to impose new tariffs on cars and other EU goods.
As a result of the increase in US tariffs on China, goods from the Far East could also increasingly enter Europe, says Rolf Langhammer, an economist at the Institute for the World Economy. "There is a fear of a lose-lose game," he says.
What can the EU offer Trump?
According to the European Commission, the EU and Trump could strike a new deal to expand US exports of liquefied natural gas (LNG). "We still get a lot of LNG from Russia, so why not use American LNG instead, which is cheaper for us and lowers our energy prices", von der Leyen said after a phone call with Trump in November.
It is also conceivable to increase imports of military technology and agricultural goods from the US and to reduce import duties on American cars. Their rate was until recently many times higher than the reciprocal US rate - 10 versus 2.5 percent.
What leverage does the EU have?
The additional EU tariffs could seriously affect some American companies. Trump has already introduced special duties on steel and aluminum imports during his first term from 2017 to 2021, justifying this with "national security interests". The EU then responded with retaliatory tariffs on American products such as bourbon whiskey and motorcycles - and manufacturers such as "Harley Davidson" then complained about the severe consequences.
ARD and DPA quote an EU official, according to whom Brussels is trying to hit the US where it hurts the most - products that have a high emblematic and symbolic value. And in order to increase political pressure, products produced in the constituencies of influential party members and friends of Trump are being targeted. For example, new EU tariffs are about to be introduced on soybeans produced in Louisiana - where House Speaker Mike Johnson lives, ARD recalls.
How are other countries reacting to the new tariffs?
In response to the new US tariffs, Canada announced its own additional tariffs on US products. As of Thursday, 25 percent customs duties will apply to US goods worth nearly $30 billion. Canadian dollars (equivalent to about 18 billion euros). Computers, sports equipment and cast iron products are particularly affected. On Tuesday, Trump announced that he would double the 25 percent tariffs on Canada to 50 percent. However, he backed down just a few hours later.
Other countries reacted more cautiously: British Prime Minister Keir Starmer expressed his disappointment - he had hoped that his country would be exempt from Trump's tariffs. Now negotiations on an economic agreement with the United States will continue, and London will not take countermeasures for the time being, announced Trade Minister Jonathan Reynolds.
Japan and Australia also hoped for exceptions and have refrained from retaliatory measures for now. Brazil has said that it has no intention of entering a trade war with the United States. The South American country is one of the most important suppliers of steel to the United States, along with Mexico and, above all, Canada.
The Chinese Foreign Ministry reacted more clearly, saying it would take "all necessary measures" to protect its own interests. Although the People's Republic of China is the world's largest steel producer, the United States is a smaller market. Trump recently imposed 20 percent tariffs on imports from China to the United States. The government in Beijing responded with counter-tariffs, but is also ready to engage in dialogue.