Tariffs DOUBLED – Can Allies Stay UNITED?

European Union officials are preparing both diplomatic and defensive trade strategies as President Trump threatens to double steel tariffs to 50 percent.

At a Glance 

  • The EU is advocating for tariff reductions while simultaneously preparing countermeasures against potential US steel and aluminum duty increases
  • President Trump has announced plans to raise import duties on steel and aluminum from 25% to 50%
  • The European Commission, which manages EU trade policy, is prioritizing negotiations with the United States
  • Trade tensions are escalating just as new US administration policies take shape

EU’s Dual Strategy: Negotiation and Preparation

The European Union announced on June 2 that it would pursue a two-pronged approach in response to threatened tariff increases from the United States. While prioritizing negotiations aimed at reducing trade barriers, EU officials are simultaneously developing countermeasures should these talks fail. This stance comes directly after President Donald Trump’s announcement to double import duties on steel and aluminum from the current 25% to a substantial 50%.

The European Commission, which handles all trade policy for the 27-nation bloc, has emphasized its commitment to finding a negotiated solution that would prevent an escalation of trade tensions between the longstanding allies. However, the Commission is also preparing defensive options should negotiations falter, demonstrating the seriousness with which the EU views the potential economic impact of increased American tariffs. 

Potential Economic Impacts

The steel and aluminum industries across Europe could face significant challenges if the threatened tariff increases are implemented. Economic analysts note that many European manufacturers operate on thin margins, and a doubling of export duties could make their products uncompetitive in the crucial American market. This would potentially threaten thousands of jobs across multiple EU member states, particularly in industrial regions already facing economic pressures.

Olof Gill, the EU Trade spokesperson, has clarified that the bloc would prefer an arrangement that reduces or eliminates tariffs entirely rather than entering into a cycle of retaliatory measures. This approach aligns with the EU’s longstanding preference for rules-based international trade governed by multilateral agreements rather than bilateral confrontations.

Historical Context of US-EU Trade Relations

This is not the first time that European steel and aluminum exports have been targeted by American tariffs. During his previous administration, President Trump implemented the 25% steel and 10% aluminum tariffs using national security justifications under Section 232 of the Trade Expansion Act. Those measures sparked immediate countermeasures from the EU, which imposed retaliatory tariffs on a variety of American goods including motorcycles, bourbon whiskey, and agricultural products.

The EU’s current stance reflects lessons learned from that previous trade confrontation. Rather than immediately announcing retaliatory tariffs, the bloc is first pursuing diplomatic channels while simultaneously preparing contingency measures. This calculated approach demonstrates a recognition that escalating trade barriers ultimately harm consumers and businesses on both sides of the Atlantic. 

Next Steps in Trade Negotiations

European trade officials are scheduled to meet with their American counterparts in the coming days to present their case for tariff reductions rather than increases. The talks will likely focus on finding a balanced approach that addresses American concerns about global steel overcapacity while preserving fair market access for European producers. If these negotiations fail to produce an agreement, the EU has indicated it will not hesitate to implement proportionate countermeasures in accordance with World Trade Organization rules.

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