EU imposes counter tariffs on $28B worth of US goods
What's the story
The European Union (EU) has announced countermeasures against the United States's recent tariffs on steel and aluminum.
The EU plans to impose duties on American goods worth €26 billion ($28.3 billion).
This decision was made by the European Commission, the executive arm of the EU, which said it would take "swift and proportionate" actions in response to the US move.
Trade escalation
US tariffs escalate trade war with EU
The EU's announcement comes on the same day the US slapped a 25% tariff on steel and aluminum imports.
The move marks a major escalation in the trade war between the two long-standing allies.
The new tariffs are almost four times bigger than similar duties levied during Donald Trump's first term when around $7 billion of the bloc's metals exports were targeted over national security concerns.
Diplomatic attempts
EU trade chief's efforts for amicable resolution
Last month, the EU's trade chief Maros Sefcovic visited Washington in a bid to negotiate a peaceful resolution with senior members of the Trump team.
He had proposed reducing tariffs on industrial goods like cars and increasing US imports of liquefied natural gas and defense goods.
However, Sefcovic said on Monday that "The US administration doesn't seem to be engaging to make a deal."
Trade protection
EU's commitment to protect its economy
Sefcovic stressed the EU's resolve to shield European businesses, workers, and consumers from unjustified tariffs.
He said, "As the US is watching over their interests, so is the EU."
The bloc has spent months working on different lists of goods to hit back at any US move.
They include politically sensitive products from certain US constituencies which would hurt the US economy more than Europe.
Market effects
Impact on European steel market
The new tariffs are likely to have a two-fold impact on the European steel market. European exports to the US are likely to fall, while imports will rise as metal is diverted away from the US.
"We can indeed expect the EU market - already saturated with cheap steel imports from Asia, North Africa and Middle East - to be further flooded," a spokesperson for industry lobby group Eurofer said.
Tariff history
EU's history with US metals tariffs
The American metals tariffs dispute dates back to 2018, during Trump's first term.
The US imposed duties on steel and aluminum exports on the grounds of national security, a claim that Brussels officials dismissed at the time.
In retaliation, the EU targeted politically sensitive companies with retaliatory duties such as Harley-Davidson Inc. motorcycles and Levi Strauss & Co. jeans.