Europe joins the trade war with the US: soybeans and motorcycles are under attack, but not bourbon
10 April 08:40
The European Union has approved the imposition of duties on American goods worth about €21 billion (approximately $23.2 billion). This decision was a response to the 25% tariffs on European steel and aluminum imposed by President Donald Trump last month, Komersant ukrainskyi reports citing Bloomberg.
A majority of the 27 EU member states voted in favor of the sanctions. Some of these duties will take effect as early as mid-April. The European tariffs are aimed at politically sensitive states for the United States and include goods such as soybeans from Louisiana (the state from which House Speaker Mike Johnson comes from), diamonds, agricultural products, poultry, and motorcycles.
The European Commission noted that the countermeasures could be lifted
“if the US agrees to a fair and balanced solution through negotiations”.
At the same time, this step intensifies the growing transatlantic trade war.
The introduction of European duties will be phased in: some will come into effect on April 15, others in mid-May, and others on December 1. Most goods will be subject to a 25% duty, and a small number of categories will be subject to a 10% duty.
Interestingly, bourbon was excluded from the list of EU goods under pressure from member states after Trump threatened to impose 200% duties on wine, champagne and other alcoholic beverages from France and other countries.
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Is it possible to reach an agreement?
It is important to understand the scale of the confrontation: The United States has already applied a universal 20% duty on almost all European exports, as well as a separate 25% duty on cars and some auto parts. Trump has also announced plans to impose additional duties on lumber, semiconductor chips, and pharmaceuticals. In total, Trump’s new tariffs affect about €380 billion of European goods.
The conflict is unfolding amid Trump’s rhetoric, which has repeatedly criticized the EU, the largest trading partner of the United States, claiming that the bloc was created to “deceive” the United States and that the EU’s trade surplus in goods is proof of unfair relations. At the same time, according to the World Trade Organization, the EU’s weighted average tariff rate in 2023 was only 2.7%.
The EU Trade Commission is already working on a roadmap of potential areas of negotiation, including tariff reduction, regulation, and standards. However, the talks have made little progress so far, and U.S. officials do not seem to have a clear mandate for negotiations from Trump yet.
It is worth noting that this trade conflict could have a serious impact on the eurozone economy, with US measures threatening to wipe out much of the economic growth that the European Central Bank is forecasting for this year and next.
Historically, it is worth noting that the EU’s fight against US metals duties began back in 2018, during Trump’s first term, when the US imposed duties on about $7 billion of European steel and aluminum exports, citing national security concerns. The EU responded by imposing duties on products from politically sensitive companies, including Harley-Davidson motorcycles and Levi Strauss jeans. The two sides reached a temporary truce in 2021, when the US partially lifted its measures and the EU froze all its restrictive measures.
Trump’s tariffs
on April 2, US President Donald Trump announced the introduction of “mirror” tariffs against almost all countries of the world (except Russia, Belarus, Cuba, and the DPRK). These tariffs, according to the White House, will be half of the tariff that a particular country has imposed on US goods. For example, China allegedly imposes a 67% tariff on US goods, so the US imposed a 34% tariff on Chinese goods.
For those countries that do not impose special duties on American goods, a basic tariff of 10% was introduced.
Trump called the introduction of such trade barriers “Liberation Day” and said that this day would go down in US history as the beginning of the restoration of the American economy and greatness.
Interestingly, the comparative table released by the White House provides data on tariffs against 185 countries, but Russia is not on the list. Instead, it includes the Herd and McDonald Islands, which were subject to a basic 10% tariff. The only thing is that there is not a single person on these islands.
