In a rapid escalation of the ongoing trade dispute, the European Union is set to retaliate massively against the United States after President Donald Trump signed new 25% tariffs on steel and aluminum. The tariffs, which went into force on Wednesday morning in Brussels—midnight in Washington DC—have drawn a rapid response from the EU, threatening to hit a wide range of US goods, including jeans, motorcycles, peanut butter, and bourbon.
European Commission President Ursula von der Leyen branded the tariffs damaging to firms and customers alike, describing them as “taxes” that could exacerbate economic woes. The EU retaliation will be implemented from April 1 and target US exports of €26 billion (£22 billion). The action will initially affect consumer goods, but further tariffs across a broader range of products—textiles, household appliances, and agricultural products—are scheduled for later in mid-April.
Its effect on consumers in Europe is going to be great, particularly at hypermarkets, where U.S. products like orange juice, peanut butter, and bourbon will be hit with higher prices. Dirk Jandura, who is president of the German Wholesale Trade Federation, threatened that a similar increase in prices would subject consumers to extra burdens on local budgets, especially when the retail trade already enjoys less profit margin.
As the EU considers measures of retaliation, there has also been a concern throughout Europe, specifically in Austria which has a sizeable number of exports to America. Christoph Neumayer, director of the Federation of Austrian Industries, referred to the requirement for Europe to act forcefully in response to the economic impact. EU officials are considering alternatives to alleviate the impact, including importing such products as soybeans and orange juice from countries like Brazil and Argentina.
Perhaps one of the worst-affected industries would be the beverage industry, particularly in the US and Europe. The EU had already imposed a 25% tariff on American whiskey previously, which devastated US distillers. A reinstatement of tariffs is an enormous setback for American producers, who were finally regaining momentum in the European market.
As the trade war heats up, both countries are gearing up for economic repercussions. America and Europe are locked into a high-stakes battle, and both countries’ industries are vulnerable to the effects of these increasing tariffs.
