EU threatens countermeasures over Trump's steel, aluminium tariffs hike

The European Commission said on Saturday that Europe was prepared to retaliate against President Donald Trump's plan to double tariffs on imported steel and aluminum, raising the prospect of an escalating trade fight between two of the world's largest economic powers. 

Trump's announcement on Friday that he would increase tariffs on imported steel and aluminum to 50 per cent from 25 per cent, intensifies his global trade war and came just hours after he accused China of violating an agreement with the US to mutually roll back levies and trade restrictions for critical minerals. 

The European Commission said it "strongly" regrets Trump's plan to increase tariffs, adding it "undermines ongoing efforts to reach a negotiated solution." 

"This decision adds further uncertainty to the global economy and increases costs for consumers and businesses on both sides of the Atlantic," a European Commission spokesperson said, adding that "the (European Union) is prepared to impose countermeasures." 

The spokesperson noted that the European Union had paused its countermeasures to create space for continued negotiations.

"The European Commission is currently finalising consultations on expanded countermeasures. If no mutually acceptable solution is reached, both existing and additional EU measures will automatically take effect on 14 July or earlier, if circumstances require," the spokesperson added. 

Trump announced the higher tariffs just outside Pittsburgh, where he was talking up an agreement between Nippon Steel and US Steel. Trump said the $14.9 billion deal, like the tariff increase, will help keep jobs for steel workers in the US. 

He later posted on social media that the increased tariff would also apply to aluminum products and that it would take effect on Wednesday. 

The planned US move ratchets up pressure on global steel producers, and has sparked protests from trading partners around the world. 

Canada's Chamber of Commerce quickly denounced the tariff hike as "antithetical to North American economic security." "Unwinding the efficient, competitive and reliable cross-border supply chains like we have in steel and aluminum comes at a great cost to both countries," Candace Laing, president of the chamber, said in a statement. 

Canada's United Steelworkers union on Saturday called the move a direct attack on Canadian industries and workers. 

Australia's centre-left government also condemned the tariff increase, with Trade Minister Don Farrell calling it "unjustified and not the act of a friend." The US is the world's largest steel importer, excluding the European Union, with a total of 26.2 million tonnes of imported steel in 2024, according to the Department of Commerce. 

As a result, the new tariffs will likely increase steel prices across the board, hitting industry and consumers alike.

Steel and aluminum tariffs were among the earliest put into effect by Trump when he returned to office in January. The tariffs of 25 per cent on most steel and aluminum imported to the US went into effect in March, and he had briefly threatened a 50 per cent levy on Canadian steel but ultimately backed off.  (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)