EU readies ‘sledgehammer’ against Trump tariffs

BRUSSELS — The EU is expected to hit back hard if U.S. President Donald Trump imposes 25 percent global steel and aluminum tariffs as planned on Wednesday, three diplomats briefed on the matter told POLITICO.

The EU has a retaliation package ready to go that dates back to Trump’s first term, including tariffs on iconic American products such as Harley-Davidson motorcycles, bourbon and jeans. If Brussels does nothing, these will kick in again at the end of the month. But it will probably go beyond that, the diplomats said.

“They will probably go full sledgehammer because they are so fed up with Trump,” said a European steel industry representative, commenting on the European Commission’s expected response. They, along with the diplomats, were granted anonymity to discuss the EU executive’s closely held deliberations.

In announcements so far, the White House has said it will make the new tariffs much broader and costlier, meaning the EU will need to up the ante as well.

The 27-nation bloc — a common market spanning 450 million people — will want to send an unmistakable message that the EU is serious about defending its economic interests should Trump fire the first shot in a trade war.

The $1.7 trillion transatlantic trade relationship has been pivotal to the West’s postwar prosperity. But Trump, angered by the persistent U.S. trade deficit in goods, sees tariffs as a way to force businesses to bring industrial investment and jobs back to the United States.

The U.S. levies on steel and aluminum would hit Canada and Mexico the hardest — but the EU, as the No. 3 supplier of steel to America, would not survive unscathed. Brussels worries that further “reciprocal” tariffs threatened by Trump would, if implemented, hit exports of automobiles, pharmaceuticals and food.

Early start

The European Commission, the bloc’s executive, will brief member countries at breakfast time on Wednesday — just a few hours after the U.S. tariffs are due to be enacted at one minute past midnight in Washington, or 5.01 a.m. Brussels time, by executive order.

In the weeks since Trump returned to the White House and started announcing tariffs, the EU has been vocal about being ready to hit back against “unjustified tariffs.” On Monday, Trade Commissioner Maroš Šefčovič said the bloc is ready “to protect its businesses, workers and consumers.”

“We can’t rely on the U.S. anymore — it’s a new reality. So we have to be tough hitting back, that’s the only medicine,” one EU diplomat said.

Šefčovič visited Washington last month in an attempt to initiate a dialogue on averting a trade war, only to conclude that the Trump administration was not interested. “In the end, one hand cannot clap,” he said on Monday.

The United Kingdom, meanwhile, is keeping a low profile. “We’re not going to have a kneejerk reaction,” said an official from the Department for Business and Trade, pointing out that No. 10 is emphasizing the U.K. will “continue to take a cool-headed approach” to tariffs and to Trump’s antagonistic trade policy.

A bigger hit

The two diplomats — like the steel industry representative — said they expect the EU’s response package to pack more of a wallop than the suspended tariffs dating back to 2018.

That’s because the Trump administration — based on his executive orders from mid-February — has changed its tariff practices substantially. Most importantly, aluminum will rise to 25 percent from 10 percent the last time.

The EU will also no longer enjoy the quotas extended under the former administration of President Joe Biden, which allowed it to export tariff-free to the U.S. Meanwhile, Trump is adding products made mostly with steel — such as bolts and radiators — to the list of goods subject to tariffs; the implications for these “derivatives” are not yet fully understood, but it could affect around €7 billion in EU exports to the U.S.

“I understand the countermeasures the EU is expected to reveal tomorrow need to be stronger than the currently suspended rebalancing tariffs,” the second diplomat said.

They added, however, that the Commission has closely guarded the extent of the tariffs and the timeline for implementing them.

The EU’s response would not be effective immediately. The retaliation package from 2018 will kick back into force as of March 31 — unless Brussels suspends it further. The new package, or an extended one, would still need to be approved in a vote by national experts to take effect.

Camille Gijs, Jakob Weizman, Graham Lanktree and Giovanna Coi contributed reporting. This story has been updated.