EU Launches $28 Billion Retaliation to Trump Tariff War

The European Union said it will impose retaliatory tariffs worth $28 billion on U.S. industrial and agricultural goods, following the Trump Administration's decision to raise tariffs on steel and aluminum imports to 25 percent.

The EU tariffs will take effect on April 1 and be fully implemented by mid-month.

The tariffs are expected to increase tensions between the two economic powers, which have faced ongoing trade disputes. Washington has signaled that Europe will need to assume greater responsibility for its own security moving forward.

Why It Matters

The EU's response marks one of the bloc's most significant trade actions against the U.S. since President Donald Trump first imposed metal tariffs on European producers in his first term.

The new measures will target a wide range of American exports, including steel, aluminum, textiles, home appliances and agricultural products.

European Commission President Ursula von der Leyen described the EU's tariffs as "countermeasures" responding to tariffs of the same value imposed by the U.S.

"We will always remain open to negotiation," von der Leyen said in a statement. "We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs."

What to Know

The European Commission, which handles trade policy for the bloc's 27 member states, said the tariffs would extend beyond metals to cover U.S. goods such as leather products, plastics and household tools.

Agricultural items including poultry, beef, seafood, nuts, sugar and vegetables will also be affected.

Trump has defended his tariff policy, arguing that the duties would revitalize the American manufacturing sector and protect domestic jobs. However, von der Leyen warned that the measures could harm economies on both sides of the Atlantic.

"Jobs are at stake. Prices will go up. In Europe and in the United States," she said. "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."

European steel producers have warned that the tariffs could have severe consequences.

Henrik Adam, president of the European Steel Association (Eurofer), said in February that the industry could lose up to 3.7 million tons of exports to the U.S.

"It will further worsen the situation of the European steel industry, exacerbating an already dire market environment," Adam said.

The U.S. accounts for about 16 percent of total EU steel exports, making it the second-largest export destination.

Trump previously imposed steel and aluminum tariffs on the EU during his first term, sparking a round of countermeasures that targeted U.S. products such as motorcycles, bourbon, peanut butter and jeans.

The EU estimates that annual trade volume between the two sides stands at about $1.5 trillion, accounting for roughly 30 percent of global trade. While the EU runs a trade surplus in goods, it argues that the U.S. enjoys an advantage in services.

According to the European Commission, trade in goods between the EU and U.S. reached €851 billion ($878 billion) in 2023, with the EU holding a surplus of €156 billion ($161 billion). Meanwhile, trade in services totaled €688 billion ($710 billion), with the EU running a deficit of €104 billion ($107 billion).

What People Are Saying

British officials, while critical of the U.S. tariffs, have said the U.K.—which is no longer in the EU—will not impose retaliatory measures of its own.

Business Secretary Jonathan Reynolds said Wednesday that the government would continue engaging with Washington to "press the case for U.K. business interests."

"We will keep all options on the table and won't hesitate to respond in the national interest," Reynolds said, adding that Prime Minister Keir Starmer's government is working toward an economic agreement with the U.S. to prevent further trade barriers.

Australian Prime Minister Anthony Albanese said U.S. tariffs on Australian steel and aluminum were unjustified, but his government would not retaliate.

"It has been foreshadowed that no country regardless of its relationship with the United States has been granted an exemption. Such a decision by the Trump administration is entirely unjustified," Albanese said.

"Tariffs and escalating trade tensions are a form of economic self-harm and a recipe for slower growth and higher inflation. They are paid by the consumers. This is why Australia will not be imposing reciprocal tariffs on the United States."

Trump said in his recent address to Congress that tariffs "are about protecting the soul of our country. Tariffs are about making America rich again and making America great again. And it's happening. And it will happen rather quickly. There'll be a little disturbance, but we're OK with that. It won't be much."

What's Next

The European Commission has emphasized that it remains open to resolving the dispute through negotiations.

However, with both sides escalating trade restrictions, businesses and consumers in both economies could face higher costs and increased uncertainty.

As the dispute unfolds, European officials will likely look to coordinate with other major trading partners affected by the U.S. tariffs.

The World Trade Organization could also become a forum for challenging the new measures, as previous trade disputes have led to legal battles between the U.S. and the EU.

For now, the tariffs are set to take effect in April, with businesses across industries preparing for potential disruptions in supply chains and rising costs for consumers on both sides of the Atlantic.

This article uses reporting by The Associated Press.