The European Union on Wednesday imposed “swift and proportionate” tariffs on U.S. goods after President Trump’s 25% tariffs on all steel and aluminum imports went into effect.
The EU called the Trump-imposed tariffs unjustified and said it carefully calibrated its response. It will allow paused tariffs from Mr. Trump’s first term to go back into effect on April 1. It will also issue a new package of retaliatory tariffs by mid-April in response to Mr. Trump’s plan to impose new levies on EU goods.
Together, the measures will impact $28.3 billion worth of U.S. goods. The levies will hit a range of everyday products, from farm goods to American whiskey, which would impact red states.
Europe said the trade relationship between the EU and the U.S. is the biggest in the world, but they had no choice but to act.
“We deeply regret this measure. Tariffs are taxes. They are bad for business, and even worse for consumers. These tariffs are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake,” said Ursula von der Leyen, president of the European Commission, the executive arm of the EU. “The European Union must act to protect consumers and business. The countermeasures we take today are strong but proportionate.”
Mr. Trump is waging trade battles with friends and foes alike, saying he is tired of trade imbalances with other nations and seeing U.S. workers undercut by cheap goods from overseas.
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He’s planning to impose by April reciprocal tariffs on nations that impose taxes on U.S. goods. Earlier this year, he imposed new tariffs on Chinese goods and steel and aluminum from all countries.
Mr. Trump has taken particular aim at Canada and the EU, saying the deck is stacked against the U.S. but Americans have the economic leverage to fight back.
“They’ve really taken advantage of us,” the president said about Europe in a Cabinet meeting in February. “They don’t accept our cars, they don’t accept, essentially, our farm products. They use all sorts of reasons why not. And we accept everything of them.”
Elsewhere, Ontario threatened to impose a 25% tariff on Canadian electricity it sends to U.S. communities but backed down Tuesday after Mr. Trump threatened to increase the metal tariffs on Canada from 25% to 50%.
Tariffs are a tax or duty paid by importers on the goods they bring in from foreign markets. Mr. Trump says tariffs are a great way to force companies to return to America or keep their operations in the U.S., employ American workers and create revenue to fund domestic programs.
The White House frequently characterizes tariffs as a tax on foreign entities, though other nations don’t pay the tariffs directly to the U.S. Treasury. In many cases, U.S. companies that are the “importers of record” will pay the levies, and they might pass on at least some of the cost to consumers through higher prices.
Stocks on Wall Street have been tanking for three weeks because investors don’t like the uncertainty around trade policy. Some investors fear a recession.
The White House says the U.S. economy is in transition and will improve once Republicans implement their tax cuts and slash regulations.
