We ‘must act’: Europe retaliates against Trump’s 25% tariffs on steel and aluminum imports

The European Union has reacted swiftly to U.S. President Donald Trump’s 25% tariffs on steel and aluminum imports that came into effect Wednesday, retaliating with their own punitive counter-measures that it said were needed to protect consumers and businesses.

The White House confirmed the duties — which will affect Canada, Australia, the EU and others — late Tuesday, but said that Trump no longer planned to raise tariffs on the metals from Canada to 50%.

The EU responded swiftly, saying it would impose counter-tariffs on 26 billion euros ($28.33 billion) worth of U.S. goods starting in April.

European Commission President Ursula von der Leyen on Wednesday told reporters that the EU “must act to protect businesses and consumers.”

“We deeply regret this measure [by the U.S.]. Tariffs are taxes, they are bad for business and worse for consumers, they are disrupting supply chains, they bring uncertainty for the economy, jobs are at stake, prices are up and nobody needs that, neither side needs that,” she said during a press conference.

Trade ties between the U.S. and EU “are the biggest in the world,” Von der Leyen said, and the relationship had brought “prosperity and security to millions of people” as well as job creation on both sides of the Atlantic, she noted.

The EU’s two-pronged approach will see previously suspended tariffs re-imposed on 8 billion euros of U.S. exports, and a slew of new countermeasures on 18 billion euros of goods in a move Von der Leyen had earlier described as “strong but proportionate.”

“We will always remain open to negotiation,” she added in a statement.

The EU said the tariffs will affect up to 26 billion euros (28.3 billion) worth of EU exports to the U.S. They  apply to industrial-grade steel and aluminum, other steel and aluminum semi-finished and finished products, and also their derivative commercial products, such as machinery parts and knitting needles.

Unlike Mexico, Canada and China, EU-origin products had not been hit by Trump’s tariffs until the steel and aluminum duties came into effect Wednesday.

Tensions between Washington and Brussels have been simmering since Trump’s inauguration in January, when the White House leader immediately signaled his intention to impose tariffs on the bloc.

“They’ve really taken advantage of us,” Trump said in a Cabinet meeting on Feb.26, adding: “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.”

One of Trump’s biggest bugbears is the U.S.’ trade deficits with a number of key trading partners, including Canada and the EU.

European Commission data show that the EU had a trade surplus of 155.8 billion euros ($159.6 billion) with the U.S. for goods in 2023, but ran a 104-billion-euros deficit on services. Overall, EU-U.S. trade in goods and services in 2023 was worth 1.6 trillion euros ($1.68 trillion), according the to EU.

Machinery and vehicles make up the largest chunk of EU exports to the U.S. by product group, followed by chemicals, other manufactured goods and medicinal and pharmaceutical products. 

— CNBC’s Katrina Bishop and Amala Balakrishner contributed reporting to this story.