On March 12, 2025, the U.S. implemented 25% tariffs on all steel and aluminum imports, eliminating previous exemptions and quotas that had been in place for countries like Canada, Mexico, and the EU. This move, enacted under a national security justification (Section 232), marks a significant escalation from earlier policies where the Biden administration had suspended or replaced some tariffs with tariff-rate quotas.
Trump has explicitly threatened to impose 25% tariffs on all EU goods, with indications that these could target sectors like automobiles, pharmaceuticals, and semiconductors as early as April 2025. During a cabinet meeting on February 26, 2025, he confirmed plans for a 25% tariff on the EU, claiming the bloc was "formed to screw the United States."
The EU swiftly countered the steel and aluminum tariffs with retaliatory duties on approximately $28 billion (€26 billion) worth of U.S. exports, effective as of March 12, 2025. These measures target iconic American products such as Harley-Davidson motorcycles, bourbon, and jeans, echoing strategies from 2018 when the EU responded to similar tariffs.
EU leaders, including European Commission President Ursula von der Leyen and Trade Commissioner Maroš Šefčovič, have vowed a "firm and immediate" response to any further "unjustified" tariffs. The EU is prepared to act decisively, with von der Leyen stating on March 11, 2025, that such tariffs "will not go unanswered," signaling readiness for a broader trade war if Trump follows through on his threats.
Analysts estimate that these tariffs could severely impact both sides. For the EU, exports worth up to $29.3 billion could be hit, while the U.S. risks higher consumer prices and supply chain disruptions. The Tax Foundation suggests that U.S. GDP could shrink by 0.4% with 309,000 job losses due to existing tariffs, with additional damage if the EU conflict escalates.
European markets have shown resilience, with stocks steady despite initial drops, buoyed by lower-than-expected U.S. inflation data on March 12, 2025. However, uncertainty persists as businesses brace for a potential second wave of tariffs in April.
Trump’s rhetoric, including calling the EU an "enemy" and aligning closer to Russia, has heightened European concerns. Leaders like Germany’s Olaf Scholz and France’s Marc Ferracci advocate a united front, while others, like Poland’s Donald Tusk, urge avoiding a "stupid tariff war."
An intriguing development is the divergence between the EU and the UK. While the EU has opted for swift retaliation, UK Prime Minister Keir Starmer has chosen a "pragmatic" approach, avoiding immediate countermeasures in hopes of securing a bilateral trade deal with Trump, highlighting a fracture in Western unity.
As of March 13, 2025, the EU-U.S. tariff war is intensifying, with the steel and aluminum tariffs already in effect and broader levies looming. The EU’s retaliatory stance and Trump’s aggressive trade policy suggest a prolonged conflict unless negotiations prevail. The situation remains fluid, with economic stakes high and diplomatic efforts ongoing but so far unfruitful.
