Department of Research, Studies and International News 12-03-2025

In response to the United States’ decision to impose tariffs on steel and aluminum imports, the European Union has announced retaliatory measures targeting €26 billion worth of American goods. This move escalates ongoing trade tensions, particularly between the EU and the administration of Donald Trump, whose policies have reignited global concerns about protectionism and economic instability.

EU condemns US tariffs as Unjustified

European Commission President Ursula von der Leyen strongly criticized the US-imposed 25% tariff on imported metals, calling it an “unjustified trade restriction.” The tariffs officially took effect at 4 AM GMT on Wednesday, prompting an immediate response from Brussels.

“We deeply regret this measure,” von der Leyen stated, adding that the EU is committed to defending both European businesses and consumers. To counteract the US levies, the European Commission will roll out a series of retaliatory trade measures starting April 1. These counteractions will primarily target industrial goods, including steel, aluminum, and other essential manufacturing materials.

Beyond industrial goods, the EU’s measures will extend to agricultural and consumer products, impacting US exports such as poultry, beef, seafood, dairy, nuts, sugar, and various vegetables. The European Commission’s plan also includes reinstating tariffs on iconic American goods like bourbon whiskey, jeans, and Harley-Davidson motorcycles, products that were similarly targeted during the previous trade disputes under Trump’s first term.

Despite the aggressive countermeasures, von der Leyen emphasized that the EU remains open to dialogue. “We will always remain open to negotiation,” she stated. However, she warned that adding tariffs in an already fragile geopolitical and economic climate would only hinder global economic stability.

French European Affairs Minister Benjamin Haddad hinted that the EU could expand its countermeasures further if necessary. Speaking to TF1 television, he suggested that additional penalties could be introduced, potentially targeting digital services and intellectual property rights, sectors that play a crucial role in US economic influence.

“If it came to a situation where we had to go further, digital services or intellectual property could be included,” Haddad stated, signaling that Brussels is prepared to escalate trade actions if Washington does not reconsider its stance.

UK’s pragmatic approach and industry concerns

While the EU has moved forward with strong retaliatory actions, the United Kingdom has adopted a more cautious stance. Treasury Minister James Murray indicated that Britain is seeking a balanced approach in response to the US tariffs, though he did not rule out potential countermeasures.

“We’re not going to retaliate immediately in that way,” Murray told Times Radio, emphasizing that the UK prefers a “pragmatic approach.” He noted that negotiations for an economic agreement with the US are already in progress, which could help resolve trade disputes without the need for additional tariffs.

However, industry leaders in the UK have expressed deep frustration over Trump’s decision. The British steel industry, in particular, has warned that these tariffs could have severe economic consequences at a time when the sector is already struggling with high energy costs and declining domestic demand.

Gareth Stace, Director General of UK Steel, described the move as “hugely disappointing” and criticized the Trump administration’s failure to recognize the UK as a strategic trade partner rather than a competitor.

“President Trump must surely recognize that the UK is an ally, not a foe,” Stace remarked. “Our steel sector is not a threat to the US but a partner to key customers, sharing the same values and objectives in addressing global overcapacity and tackling unfair trade.”

Stace further warned that these tariffs could not come at a worse time for UK steel producers, who are already contending with an oversupplied global market and increasing protectionist policies worldwide.

Tensions with Canada and a sudden reversal

The escalating trade conflict between the US and its allies was further highlighted by a dramatic development on Tuesday. President Trump initially threatened to double tariffs on Canadian steel and aluminum, responding to a Canadian proposal to raise electricity prices for US consumers.

However, the crisis was swiftly de-escalated after Ontario Premier Doug Ford agreed to suspend his province’s plans to impose a 25% surcharge on electricity exports to several US states, including Minnesota, Michigan, and New York. Following Ford’s decision, Trump withdrew his threat to increase tariffs on Canadian metal exports.

This episode underscores the unpredictable nature of current US trade policy and its ripple effects on international markets. As the EU, UK, and Canada navigate these challenges, global trade relations remain in a delicate balance.

What Comes Next?

With the EU’s countermeasures set to take effect in April, tensions between Washington and Brussels are unlikely to ease in the near future. If the US continues with its tariff policies, the EU may expand its list of targeted industries, potentially affecting sectors beyond steel and agriculture.

At the same time, the UK’s more cautious approach suggests that London hopes for a diplomatic resolution rather than direct retaliation. However, with pressure mounting from UK industry leaders, the government may have to reconsider its stance if economic damage becomes more apparent.

For now, both sides appear reluctant to engage in a full-scale trade war but remain firm in their positions. The coming weeks will be crucial in determining whether negotiations can ease tensions or if retaliatory measures will escalate further, deepening divisions in global trade relations.