Trade War Heats Up: EU Prepares to Hit Back at New US Tariffs on Steel and Aluminum

Tensions between the United States and the European Union are once again flaring up over trade, as Washington moves forward with 25% tariffs on steel and 10% tariffs on aluminum imports from Europe. The European Commission swiftly condemned the move and is preparing a series of countermeasures, setting the stage for another major trade clash between the two economic giants.

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Brussels Slams Washington’s Tariff Decision

The European Commission has been quick to push back, with President Ursula von der Leyen calling the decision unjustified and warning that the EU will not sit idly by.

"Unfair trade measures against the EU will not go unanswered. We will respond with firm and proportionate countermeasures to protect our economic interests," von der Leyen stated.

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Her reaction reflects broader frustration among European officials, who view the tariffs as a protectionist policy that disregards past agreements aimed at preventing such trade conflicts.

A Trade Battle Reignited

This is not the first time that US-EU relations have been tested over steel and aluminum imports. In 2018, former President Donald Trump imposed similar tariffs, citing national security concerns as justification. The EU responded by slapping duties on American-made motorcycles, jeans, and bourbon whiskey, targeting products with strong political and economic significance in the US.

In 2021, both sides agreed to a temporary truce, with the US replacing blanket tariffs with a quota-based system that allowed a limited volume of European metals to enter duty-free. However, that arrangement is now at risk of collapsing as Washington moves forward with a new round of tariffs.

EU Prepares a Coordinated Economic Response

Brussels is already considering reactivating previous tariffs that were paused under the 2021 agreement. According to a European government official, lifting those existing measures would be a quick and immediate response, while additional trade penalties could follow after further review.

The EU has assembled a list of American imports that could be targeted, ensuring that any retaliation would have a meaningful impact. Potential targets could include agriculture products, industrial machinery, and key US exports to Europe, increasing pressure on Washington to reconsider its stance.

German Chancellor Olaf Scholz reinforced Europe’s unified stance, emphasizing that the bloc is fully prepared to counter US actions.

"If the United States leaves us no alternative, the European Union will act together as one. As the largest market in the world, we have the strength to do so," Scholz stated.

Trade Experts Warn of Wider Economic Consequences

Economists and trade analysts warn that an escalating tariff war between the US and EU could have far-reaching effects on global markets, potentially disrupting supply chains and raising costs for businesses on both sides of the Atlantic.

Ignacio Garcia Bercero, a former EU trade negotiator, argued that Washington’s move could ultimately backfire, hurting American industries that rely on European steel and aluminum.

"This is a blatant case of protectionism and economic self-harm. The EU must respond strategically to ensure the US understands that trade policies have consequences," he said.

Retaliation Could Begin As Soon As March

The EU's window for response is narrowing, with the new US tariffs set to take effect on March 12. European officials have hinted that retaliatory measures could be announced before the end of March, aligning with the expiration of the 2021 agreement that had temporarily halted the previous trade dispute.

With both sides digging in their heels, businesses across industries are bracing for potential disruptions. The possibility of a prolonged trade conflict is growing, raising concerns about higher costs for manufacturers, strained diplomatic relations, and a further slowdown in global trade.

For now, Brussels is making it clear: if Washington follows through on its tariff plans, Europe will respond in full force.

Also Read: Live Updates: Trump Imposes 25 Percent Tariff on Steel and Aluminum Imports CFPB Shutdown