EU Braces for $29.3 Billion Blow from Trump's Steel, Aluminum Tariffs

Brussels: The European Union is preparing for an economic hit of up to €28 billion ($29.3 billion) as U.S. President Donald Trump revives his controversial steel and aluminum tariffs. The move, aimed at reshaping global trade policies, threatens to intensify transatlantic tensions.

According to sources familiar with the EU's internal assessments, the new tariffs could impact four times more European exports than the last time Trump imposed duties on the bloc’s metals sector in 2018.

"The situation is still fluid, but we are preparing a proportionate and rapid response," an EU official said, speaking on condition of anonymity.

Trump’s New Trade Policy: No Exemptions Planned

Trump’s latest trade restrictions include:

• A 25 percent tariff on European steel
• Tariffs on aluminum exports
• Potential duties on derivative products
• Reciprocal tariffs based on trade barriers imposed by U.S. partners

Unlike the 2018 tariffs, which included certain exemptions, the new round of duties is expected to apply broadly. These tariffs could take effect as early as March 12.

A Renewed Trade Battle: How We Got Here

The EU and the U.S. have had long-standing disputes over steel and aluminum tariffs. The tensions first escalated in 2018 when Trump imposed:

• A 25 percent duty on steel
• A 10 percent duty on aluminum
• Exemptions for select products

Brussels responded by targeting politically sensitive American industries, imposing tariffs on Harley-Davidson motorcycles, Levi Strauss & Co. jeans, agricultural goods, and other products.

In 2021, the two sides reached a temporary agreement under which the U.S. replaced its blanket tariffs with tariff-rate quotas, limiting duties on metals up to a certain import threshold. In return, the EU froze its retaliatory measures.

However, Trump’s new tariffs threaten to undo this agreement, prompting the EU to reconsider its earlier trade countermeasures.

EU Prepares for Retaliation

EU trade chief Maros Sefcovic briefed European ambassadors on the situation following his visit to Washington, where he met with:

• U.S. Commerce Secretary Howard Lutnick
• Jamieson Greer, nominee for U.S. Trade Representative
• National Economic Council Director Kevin Hassett

While the meetings were described as "positive," no formal negotiations have taken place.

The European Commission, which oversees the bloc’s trade policies, has warned that the EU will respond swiftly if the tariffs are imposed. Brussels could reinstate its previously suspended trade measures as early as March.

"The EU is preparing targeted retaliation, ensuring that any countermeasures cause more economic pain for the U.S.," an official familiar with the discussions told Bloomberg.

Brussels is reportedly considering imposing tariffs on key U.S. sectors, including industrial goods, agriculture, and high-value American exports to Europe.

Can a Trade War Be Avoided?

To prevent a full-scale trade confrontation, the EU has proposed a compromise, offering the U.S. a deal to lower tariffs on industrial goods, including automobiles—a longstanding demand from Trump.

However, it remains unclear whether the U.S. administration will agree to negotiations or proceed with the tariffs unilaterally.

As the March 12 deadline approaches, European officials are working to find a diplomatic resolution while simultaneously preparing for a potential trade conflict.

What Happens Next?

• Trump’s final decision on steel and aluminum tariffs is expected soon
• The EU’s potential retaliatory measures could be announced in March
• High-level trade negotiations between Brussels and Washington may take place in the coming weeks

If the U.S. moves forward with the tariffs, 2025 could witness a renewed U.S.-EU trade war, with far-reaching consequences for global markets, supply chains, and key industries on both sides of the Atlantic.