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LAST UPDATE | 9 Apr
THE EU HAS approved countermeasures against tariffs imposed by US president Donald Trump on European steel and aluminum last month.
The measures, adopted today, are only in response to the US tariffs on steel and aluminium and will implement duties on 99 items, at a rate of mostly 25% from 15 April.
Further EU countermeasures against the additional US tariffs, announced by Trump last week, are expected – but European leaders are prioritising negotiations first.
Ireland, Italy and France began lobbying the European Commission, which coordinates trade policy across member states, after it was announced that previously implemented tariffs on American alcohol would come into effect again.
However, distillers have been given some welcome reprieve after whiskey, spirits and wines from the US were left of the European tariff list. It was feared that Trump would have targeted the lucrative industry in the EU in response.
A trade spokesperson for the EU has repeatedly labelled the US tariffs on steel and aluminum as “unjustified and damaging” – which will cause economic harm to both sides, as well as the global economy.
However, the spokesperson has said that it is still the position of the European Commission to engage in negotiations with the US to remove the tariffs on the metals as well as the 20% duties announced last week.
The EU has yet to issue a response to the latter, choosing instead to try and de-escalate the situation and return to a normal trading relationship with the American market.
Hungary’s Prime Minister, Viktor Órban, was the only leader to vote against issuing today’s tariffs. The approval is expected to result in a harsh response from Trump, as the US president escalated tariffs against China following their response to tariffs.
Scott Bessent, US Treasury Secretary, said earlier today that countries which do not retaliate to Trump’s fresh tariffs would not face higher rates, after Washington and Beijing entered a tit-for-tat escalation.
“I think what a lot of people are missing here is that the levels that were put out last Wednesday are a ceiling, if you don’t retaliate,” Bessent told a summit in Washington, adding that China has chosen to escalate the situation.
Speaking in the Dáil today, finance minister Paschal Donohoe said that a tit-for-tat response to the separate US tariffs issued last week will place a “dark shadow” over the Irish economy and reiterated Europe’s intention to de-escalate.
Donohoe, who is also the President of Finance Ministers in the Eurozone (Eurogroup), said US tariffs are likely to have a negative impact on economic growth in Europe, but Ireland is coming to the shock from a strong position.
He added that the outcome of a trade way may cost up to 80,000 jobs in Ireland.
“That said, the is not something that the government, or even the European Union, can fully control. So, it is important to take stock of where our economy is at, in order to evaluate how well we might absorb this policy-induced shock.”
The Fine Gael TD said the Irish economy has been tested in recent years – through Brexit, the covid-19 pandemic and the economic impacts arising from the Russian invasion of Ukraine. He said that the resilience of the economy is set to be put to an extreme test.
As a result, Donohoe insinuated that proposed tax cuts and capital investment programmes might be paused, telling the Dáil that a “balanced and sustainable approach” will have to be taken to budgetary policy.
“We hope negotiations will bear fruit and that a more normal trading relationship between the European Union and the United States can be restored,” he said today, adding that the focus in Ireland will be how to “insulate” the economy from shocks.
The new tariffs, which will affect items such as orange juice and cranberries, will undo a suspension on retaliatory measures that the EU implemented in 2018 during Trump’s first term and later lifted in 2021 when Biden was in office.
On 16 May, a further 25% duty will be imposed on US exports such as steel and polyethylene, which is the most widely used plastic in the world and is found in shopping bags, toys, and bottles.
And later in the year, on 1 December, a 25% duty will come into force on almonds and soybeans.
These products are some primary exports from Trump-allied states, with the EU seeking to target the local economies in those areas in order to put pressure on the US President’s political peers to lobby the White House to negotiate.
The US is the world’s second-largest soybean producer and exporter, and last year the EU purchased around $2.4 billion worth of soybeans from the US. The EU also imported around $1.3 billion worth of almonds from the US last year.
Meanwhile, the EU is understood to also be targeting items from Republican strong holds, such as ice cream from Arizona and handkerchiefs from South Carolina, according to Politico.
With reporting by Muiris Ó Cearbhaill & Andrew Walsh
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