EU Retaliates After Trump Tariffs Take Effect, But UK Breaks With Europe And Refuses To Respond

The EU has retaliated against Trump’s 25% tariffs on steel and aluminum just hours after  they took effect at midnight New York time, escalating a trade war that has rattled financial markets and threatened the global economy. The European Commission said its measures would affect up to €26bn of American goods, matching the US tariffs on European exports, and would take effect in April, leaving some time to negotiate with Washington. 

European Commission president Ursula von der Leyen said the EU regretted Trump’s decision and that tariffs were “bad for business, and even worse for consumers” adding that “tariffs are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices will go up.” They will go up… for Europe, pushing the economy further into stagflation.

We deeply regret the US tariffs imposed on Europe.

Tariffs are taxes.

They are bad for business, and even worse for consumers.

Today Europe takes strong but proportionate countermeasures.

We remain ready to engage in dialogue ↓ pic.twitter.com/5m1bGZjnsx

— Ursula von der Leyen (@vonderleyen) March 12, 2025

Brussels hit back after the US tariffs came into force on Wednesday, as Trump pressed ahead with his trade agenda despite growing concern over the risk of a domestic recession. 

As part of its retaliation, Brussels reinstated measures introduced during Trump’s first term on €4.5bn of US exports from April 1. These include levies of up to 50% on products such as bourbon whiskey, jeans and Harley-Davidson motorcycles. That’s right: when you barely imports goods from the US, these are the “essential” products you are forced to crack down on.

The EU has also drawn up levies on a further €18bn of US goods, which could include cosmetics, clothes, wood, soybeans, chicken, beef and other agricultural produce the FT reported. The measures, which could be expanded to include another €3.5bn of goods, require approval by EU countries and would come into force on April 13. 

A senior EU official said soybeans were on the list of targets because they are grown in Louisiana, home state of House of Representatives Speaker Mike Johnson. 

“We’re happy to buy our soybeans from Brazil or Argentina,” they added. “We want to ensure there is pressure within the American system to lift their tariffs,” a second official said. 

But in a stark example of just how much Trump has broken the world’s resolve, the UK broke with the European Union and its decision to retaliate immediately, and reaffirmed its commitment to US trade talks even as British exports were also swept up in President Donald Trump’s global steel and aluminum tariffs.

UK leftist Prime Minister Keir Starmer said he was “disappointed” by the US decision to impose 25% levies on foreign metal products without exemptions on Wednesday morning, telling the House of Commons that his government would keep “all options” on the table in terms of a response. Yet despite the jawboning, Junior Treasury minister James Murray told Times Radio the UK wouldn’t retaliate immediately while reserving the right to do so in due course. 

Despite the US being the UK steel industry’s second-biggest export market, the UK said it was “focused on a pragmatic approach” as it seeks to negotiate a broader economic deal with the White House.

The US move is a blow to the British premier, whose visit to the White House last month appeared to put the UK on a good footing, with officials holding out hope that the talks for a “new economic deal” touted by Trump and Starmer would spare the country from the initial salvo of tariffs.

They did not. 

Britain had been making the case for an exemption by pointing out that its trade in goods with the US is broadly balanced, and that UK steel and aluminum is a small fraction of that imported by the US.

Nobody cared.

Business and Trade Secretary Jonathan Reynolds held a call with US Commerce Secretary Howard Lutnick on Sunday, in which the tariffs were discussed. Starmer also urged Trump not to target British manufacturers in a call with the president on Monday.

“We are focused on a pragmatic approach and are rapidly negotiating a wider economic agreement with the US to eliminate additional tariffs and to benefit UK businesses and our economy,” Reynolds said on Wednesday in a statement.

The British response, or lack thereof, has set up a split with the continent, call it Brexit #2 if you will, as the European Commission launched what it called “swift and proportionate countermeasures.” While that underscores the extra flexibility afforded to the UK by its formal exit from the bloc since the last Trump-led trade war, it complicates Starmer’s efforts to rebuild economic and security ties with European allies.

Going back to Europe, last month Trump announced that he would impose the duties on metals, ripping up agreements struck between his predecessor Joe Biden and US trading partners to allow certain quantities of steel and aluminum to enter the country duty free. US administration officials have framed the move as a response to “foreign players” that they say are responsible for “surging exports” of metals to America that are undermining domestic producers. 

Trump has also expanded the metals tariffs to apply to a wide range of products containing steel and aluminum, including tennis rackets, exercise bikes, furniture and air conditioning units. China, the world’s largest steelmaker and exporter, warned it would “take all necessary measures to safeguard its legitimate rights and interests” but did not immediately announce retaliatory tariffs. 

Australian Prime Minister Anthony Albanese said the tariffs were “entirely unjustified”, adding: “This is not a friendly act”. The country was exempt from similar tariffs implemented during Trump’s first term, and the country’s steel producers supply the US defence and manufacturing sectors. 

The full list of steel and aluminium products subject to the levies represented $151bn of imported goods in 2024, according to an analysis by Simon Evenett and Johannes Fritz of the St Gallen Endowment for Prosperity Through Trade.

Speaking to the FT, Ted Murphy, a partner at law firm Sidley Austin, said Trump’s sweeping new metals tariffs represented a “big change” from his approach when he introduced similar levies in 2018 and allowed exclusions for some products.

“The product exclusions were vetted through a US government process to confirm the products weren’t available in the US,” said Murphy. “So taking that away will mean a lot of folks will have to pay the tariff because they can’t source these products domestically.”

Trump on Tuesday announced he would double the tariffs applied to steel and aluminium imports from Canada to 50% marking an escalation in his trade war with one of the US’s top three trading partners, before reversing course later in the day after Ontario, which had on Monday announced a 25% surcharge on power exported to the US, capitulated and said it would suspend the charge in a bid to de-escalate the tit-for-tat tariffs.