The EU has only late hoped to avoid further escalation of the customs conflict with the US. However, in the mediate of ongoing negotiations, US president Donald Trump announced a doubling of the existing peculiar tariffs on steel and aluminium imports from 25 to 50 percent. Does this mean that a real trade war is inevitable? Here are the most crucial questions and answers:
Why is the fresh announcement surprising?
Until recently, it seemed that Donald Trump might besides be curious in an amicable solution to the trade conflict. After Trump threatened the EU with another drastic tariff increase since early June, he first spoke with European Commission president Ursula von der Leyen at the end of last week. Trump then withdrew the threat and made it clear that the negotiations would proceed until 9 July.
Since then, respective telephone calls have been held between commercial representatives of both parties. Recently, EU Trade Commissioner Maros Sefcovic spoke to American Trade Secretary Howard Lutnick on Friday.
How does the EU respond to the fresh announcement?
Initially, there was no consequence from the European Commission, which is liable for customs negotiations. She has late made it clear that she wants to focus on negotiations. However, if the fresh tariffs actually enter into force on Wednesday (4 June) and will besides apply to EU imports, it is likely to be hard not to react.
What can the EU answer look like?
EU associate States' governments already paved the way in April for preliminary retaliatory duties ranging from 10 to 25 percent in consequence to fresh customs rates imposed by US president Donald Trump. Theoretically, they could enter into force immediately and affect, among another things, manufacturers of jeans, motorcycles, beef and citrus fruits in the USA. Further measures are under way. Additional fees for industrial and agricultural products specified as cars, sweet potatoes and whisky are being considered.
What does Trump want to accomplish through customs?
The U.S. president wants to usage tariffs to correct alleged trade imbalances and safe production facilities in the US. Additional import fees would strengthen the American steel industry, said on Friday in a speech to steel mill workers in Pennsylvania.
At the same time, customs gross is intended at least partially to finance its costly electoral promise of crucial taxation cuts. The formal peculiar duties already in force on imports of steel, aluminium and cars are justified by the US government for reasons of national safety protection. However, from an EU point of view, the approach and argument are not in line with the WTO principles.
What consequences could EU duties have?
The European steel manufacture was already at the beginning of the year afraid that production capacity and jobs would should be cut due to fresh US duties. In 2024, the USA was the second largest export marketplace for European steel producers. According to the European Steel manufacture Association (Eurofer), at the time they accounted for 16 percent of full EU steel exports.
The largest German steel producer, Thyssenkrupp Steel, nevertheless approached these announcements calmly. The company based in Essen indicated that its main marketplace for steel is Europe. The exports of steel products to the USA were negligible.
Can the EU work with Trump on steel?
Theoretically, the EU and the US could agree to cooperate to address the global marketplace surplus caused by massive subsidies. China in peculiar is responsible. EU companies besides endure enormously from price dumping. The European Commission has so set up a strategy of safeguard measures for the home steel industry. It was late sharpened again in the spring.
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