EU promises firm response to Trump’s new aluminium and steel tariffs

On Tuesday, European Commission President Ursula von der Leyen promised that Europe would respond firmly to President Trump’s decision to tax all steel and aluminium imports to the US, raising worries about a possible trade war.

Trump signed orders late Monday putting a 25% tax on all incoming steel and aluminium and exempting no country. The White House says these new rules will start on March 4.

According to Reuters, Von der Leyen criticised the US decision, saying that these import taxes hurt both businesses and consumers. She pointed out that European companies typically sell about 3 billion euros ($3.10 billion) worth of steel to the US each year.

“Unjustified tariffs on the EU will not go unanswered – they will trigger firm and proportionate countermeasures. The EU will act to safeguard its interests,” she said.

While von der Leyen didn’t spell out exactly what Europe would do, they might bring back their 2018 taxes on American products. These taxes, which targeted things like bourbon, motorcycles, and orange juice, were put on hold after von der Leyen made a deal with former President Joe Biden. They’re currently paused until the end of March.

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EU trade leader Maros Sefcovic told the European Parliament this was a “lose-lose scenario.” He said they’re now figuring out exactly what the US taxes mean and how Europe should respond.

Trump’s announcement caused gold prices to jump to a record $2,942.70 in early trading Tuesday as investors looked for safer places to put their money.

European trade ministers will meet online Wednesday to discuss how the EU should handle this situation. The taxes Trump put on steel and aluminium in 2018 were stopped when Biden became president, though they were replaced with limits on how much could be imported.

European steel makers have already been selling less to America, dropping by about 1 million tonnes to 2.2 million tonnes between 2019 and 2024. They’re worried that the 15 million tonnes of steel that America bought from other countries last year might now be sent to Europe if these new US taxes take effect.