European Commission president announces EU countermeasures to US tariffs
Here is European Commission president Ursula von der Leyen announcing the EU’s countermeasures this morning.
As of this morning, the United States is applying a 25% tariff on imports of steel and aluminium. We deeply regret this measure.
Tariffs are taxes. They are bad for business and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices up. Nobody needs that on both sides, neither in the European Union nor in the United States.
The European Union must act to protect consumers and business.
She said the counter measures “are strong but proportionate”. As the United States is applying tariffs worth $28bn, the EU is responding with countermeasures worth €26bn. She added:
In the meantime, we will always remain open to negotiations.
Key events
The industry group spiritsEUROPE said it is “extremely concerned” by the EU announcement of €26bn countermeasures against new US tariffs on global steel and aluminium exports.
It urged the EU and the US to “keep spirits out of unrelated disputes”.
Pauline Bastidon, trade & economic affairs director at spiritsEUROPE, said:
Yet again, spirit drinks have become collateral damage in an unrelated trade dispute. As highlighted in our numerous engagements with the European Commission over the last seven years, we fail to understand how this will help with the broader, unrelated dispute on steel and aluminium. The EU and US spirits sectors stand united in their steadfast commitment to maintaining transatlantic spirits trade tariff-free.
EU official uses ‘stinking fish’ analogy for negotiations
Lisa O’Carroll
Irish prime minister Micheál Martin will be meeting Donald Trump in the Oval Office around 2.45pm London time where they will face the media before going into a bilateral meeting. Ahead of that he will have a breakfast meeting with JD Vance, with Ireland’s surplus trade with the US very much in the cross hairs.
An EU official this morning suggested it was pointless at this stage to try and negotiate with the US as tariffs were such a crude way to address imbalances and also warned that no EU leader has the competency to do so.
It is not very productive to now start negotiating about removing the tariffs. That’s a bit stinking fish theory, where you put a stinking fish on the table, and then you start negotiating to remove that stinking fish, and then you say, Wow, we have a great result. There’s no stinking fish on the table. That is not a very productive conversation,
the official said.
That is not our objective. What we are looking for in negotiations is a productive discussion about creating value to what is the largest trade and investment relationship in the world, which is the transatlantic relationship.
To recap: The EU has announced it will impose trade “countermeasures” on up to €26bn (£22bn) worth of US goods in retaliation to Donald Trump’s tariffs on steel and aluminium imports, escalating a global trade war.
The president of the European Commission, Ursula von der Leyen, called the 25% US levies on global imports of the metals “unjustified trade restrictions”, after they came into force at 4am GMT on Wednesday.
“We deeply regret this measure,” von der Leyen said in a statement, where she announced “strong, but proportionate” countermeasures would come into force from 1 April. “Tariffs are taxes, they are bad for business and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy,” she said.
The retaliatory measures include Brussels reimposing tariffs on US goods including bourbon whiskey, jeans and Harley-Davidson motorbikes, which it introduced during the first Trump term and later suspended after talks with his successor, Joe Biden.
These tariffs, which target notable US goods worth €4.5bn, often from Republican states, will snap back on 1 April. The list was worth €6.3bn in 2018 but has shrunk because of Brexit and declining US exports.
Separately, the commission plans further retaliation targeting goods worth €18bn, including a wide range of steel and aluminium products, as well as agricultural produce, such as poultry, beef, seafood and nuts. These tariffs would be imposed from mid-April, after a vote by EU member states and consultations with industry in an attempt to minimise damage to the European economy.
“We try to hit … where it hurts,” said a senior EU official, who said the bloc was targeting soya beans, which are grown in Louisiana, the state of the US speaker of the House, Mike Johnson. “We love soybeans, but we’re happy to buy them from Brazil or from Argentina or from anywhere else.”
While the commission announced that its measures would total €26bn, EU officials later said they would probably target €22.5bn of US goods, as some products are likely to be filtered out after talks with businesses and member states.
However, further steps have not been ruled out. France’s European affairs minister, Benjamin Haddad, said on Wednesday that the EU could “go further” in its response to the US tariffs. The measures “are proportionate”, Haddad told TF1 television. “If it came to a situation where we had to go further, digital services or intellectual property could be included,” he said.
EU officials hope that pressure on Republican states and US business will help bring about a deal.“We will always remain open to negotiation,” von der Leyen said. “We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs.”
Britain will not issue its own immediate measures in response to the US tariffs but the government said it would “reserve our right to retaliate”.
The introduction of EU measures came after a day of drama on Tuesday, when Trump threatened to double tariffs on Canadian steel and aluminium in response to Canadian threats to increase electricity prices for US customers.
The US president backed off from those plans after the Ontario premier, Doug Ford, agreed to suspend his province’s decision to impose a 25% surcharge on electricity exports to the states of Minnesota, Michigan and New York.
‘This trade war serves no-one’: business and trade committee chair pushes for tariff exemptions
The chair of the UK’s influential business and trade committee has urged the government to push to secure tariff exceptions, after the US began enforcing higher (25%) tariffs across the board on steel.
Next Tuesday, the committee will hold a session with steel industry representatives on support for the industry and its survival, but the latest tariffs will now be centre stage.
Liam Byrne, the chair of the cross-party committee, said:
This trade war serves no-one. The UK government must push for urgent negotiations with the US to secure exemptions, and work with British businesses to protect them from these damaging measures.
The US blanket 25% tariff on global steel imports is deeply concerning for UK industry, threatening jobs and competitiveness at a time when our steel sector is already under immense pressure.
Bridgnorth Aluminium operates the only fully integrated aluminium coil rolling plant in the UK and employs 330 people in Shropshire.
The company sells 20% of its volumes into the US and says the introduction of aluminium and steel tariffs will create uncertainty and, potentially, makes the business less competitive than the current system of quotas and exemptions.
Adrian Musgrave, head of sales at Bridgnorth Aluminium, said:
These tariffs add another dimension to the global uncertainty we are all currently dealing with.
If there is no movement on the 25% rate it will make trading with the US more difficult for us as a business, but it could also cause supply and cost issues for firms in America too.
For example, for a significant portion of our US sales, there is currently no US producer. This means there is no threat to domestic aluminium production, yet companies using our aluminium may soon be hit by rising costs.
What would we like to see? A deal between the UK and the US that removes tariffs all together or significantly reduces it from the 25% rate. This is something we are championing with the Department for Business and Trade and key manufacturing bodies, such as the Aluminium Federation, Confederation of British Metalforming and Make UK.
We are grateful for the engagement of the UK government and the manufacturing associations, who are all lobbying hard on our behalf.
The European Union exported €77.8bn of iron and steel and related articles last year.
It imported €73.1bn, resulting in a trade surplus of €4.7bn, according to the latest official figures from Eurostat, the EU’s statistics office, out this morning.
Compared with 2019, there was a substantial increase in the trade of these products: exports rose by 15.2%, or €10.3bn, and imports climbed by 23.7%, or €14bn. These increases occurred despite a decline in the physical weight of exports by 17.3% and imports by 1.6%, indicating that the value rise was primarily driven by increasing prices, Eurostat said.
For iron and steel, Türkiye was one of the main trading partners last year, occupying the first place in exports with a total of €6.2bn and third place in imports with €3.5bn.
The United States was the second biggest export partner with €5.4bn worth of iron and steel, followed by the United Kingdom (€4bn), Switzerland (€2.1bn) and Mexico (€1.7bn).
‘I feel utter anger’: a movement to boycott US goods is spreading
‘I feel utter anger’: From Canada to Europe, a movement to boycott US goods is spreading.
The renowned German classical violinist Christian Tetzlaff was blunt in explaining why he and his quartet have cancelled a summer tour of the US.
“There seems to be a quietness or denial about what’s going on,” Tetzlaff said, describing his horror at the authoritarian polices of Donald Trump and the response of US elites to the country’s growing democratic crisis.
I feel utter anger. I cannot go on with this feeling inside. I cannot just go and play a tour of beautiful concerts.
Tetzlaff is not alone in acting on his disquiet. A growing international move to boycott the US is spreading from Scandinavia to Canada to the UK and beyond as consumers turn against US goods.
Most prominent so far has been the rejection by European car buyers of the Teslas produced by Elon Musk, now a prominent figure in Trump’s administration as the head of the “department of government efficiency” a special group created by Trump that has contributed to the precipitous declines in Tesla’s share price. About 15% of its value was wiped out on Monday alone.
The fall in Tesla sales in Europe has been well documented, as has a Canadian consumer boycott in response to trade tariffs and Trump’s calls for Canada to become America’s 51st state, but the past week has seen daily reports of cultural and other forms of boycotts and disinvestment.
Germany, Ireland and Italy likely to be hit hardest by US tariffs
Lisa O’Carroll
Only three EU countries operate a goods trade surplus with the US – Germany, Ireland and Italy – and are likely to be hit hardest by the US tariffs.
Germany’s trade surplus in goods was €57bn in 2023, according to official US data. In 2023, Germany sold€144bn worth of goods to the US. German made cars accounted for €22bn of that with live medical products including vaccines, blood, antisera and cultures accounting for another €11.4bn.
The US sold €87bn worth of goods to Germany including €8.25bn worth of cars.
Ireland has the second largest trade imbalance, a surplus of €50bn, according to official data for 2023, driven largely by the export of pharmaceuticals to the US from large US multinationals manufacturing in Ireland such as Pfizer. Agricultural products including butter are another big export.
In third place in 2023 was Italy which has a trade surplus was €41bn, selling about €65bn worth of goods to the US. Packaged medicines, cars accounted for about €5bn and €4.66bn of all exports respectively.
US exports to Italy, were worth about €24bn in 2023, dominated by crude oil, hormones and gas, according to official US data.
The UK’s GMB union says the tariffs are “potentially disastrous for all sides”.
Charlotte Brumpton-Childs, GMB national officer, said:
The USA gains nothing and in many instances will be undermining its own manufacturing industry.
There are shipments currently in the Atlantic, delayed by bad weather that could be subject to tariffs that weren’t planned to be.
The government is using all levers available and GMB is still hopeful we can get a common sense outcome.
We must not take our eye off the EU and their response to tariffs which could further compound the pressure the UK industry will face.
European Commission president announces EU countermeasures to US tariffs
Here is European Commission president Ursula von der Leyen announcing the EU’s countermeasures this morning.
As of this morning, the United States is applying a 25% tariff on imports of steel and aluminium. We deeply regret this measure.
Tariffs are taxes. They are bad for business and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices up. Nobody needs that on both sides, neither in the European Union nor in the United States.
The European Union must act to protect consumers and business.
She said the counter measures “are strong but proportionate”. As the United States is applying tariffs worth $28bn, the EU is responding with countermeasures worth €26bn. She added:
In the meantime, we will always remain open to negotiations.
“The latest announcement on tariffs stretches far wider than the global steel and aluminium industry. Unilateral tariffs of this nature break international law,” said Chris Southworth, secretary general of the International Chamber of Commerce United Kingdom.
He explained:
The bigger message from the Trump administration is everybody is now in the firing line, whether we’re allies, friends or foes, G7, G20, NATO, everybody is now in the frame for tariffs from the US.
This is a completely non-discriminatory approach, that will absolutely damage the long term reputation of the U.S as a reliable partner.
This a critical moment for the global community, who now need to pull together, and respond collectively. The UK has an incredibly important role to play in that response, by helping to broker a dialogue with the US to get to a solution, that can work for everybody.
It is hard to see how companies will now not now pause investment and be looking to potentially reroute trade away from the US to less volatile markets.
He warned that this will impact American businesses too – especially in the aerospace, automotive and construction.
The UK plays an incredibly important role in the international community. We’re a G7 economy, we’re a big ally of the US, we work very well with the US. However, in this particular case, we need to use our pragmatism and leverage the deep relationships we have with lots of countries around the world, whom will be looking at this with deep concern, and facilitate a better solution.
ECB chief warns trade, defence shocks could lead to persistent inflation
The eurozone economy is facing exceptional shocks from trade, defence and climate issues, which could increase inflation volatility and raise the risk that price growth becomes more persistent, according to European Central Bank president Christine Lagarde.
Giving a speech in Frankfurt, she said it is imperative that the bank doubles down on its 2% inflation target and outlines how it reacts to various shocks.
Our expectations have indeed been swept aside in the last few years, and in the last few weeks in particular. We have seen political decisions that would have been unthinkable only a few months ago.
The central bank, which sets interest rates for 20 EU countries that form the eurozone, has cut rates six times in since June but provided no clear hint about future policy last week, leaving markets guessing.
Lagarde said trade fragmentation is likely to lead to larger, more disruptive price changes and could in principle, much like extra defence spending, lead to higher inflation. But there similarly a risk that such shocks counteract each other and extinguish price pressures, she argued.
The key issue for the ECB is that inflation reacts disproportionately more strongly to large shocks than small ones, and such large shocks could make inflation more durable.
These disproportionate price reactions, coupled with the current wage setting mechanism, risk creating persistent inflation problems, she warned.
If such state-dependent pricing becomes standard when the economy is hit by large shocks, but the frequency of wage-setting remains below that of price adjustment, we could see inflation becoming more persistent.
Large shocks would lead to a faster pass-through to inflation, and then wages would have to catch up with prices in a staggered way.
Lagarde did not offer a solution but argued that the ECB must be clear in what it can and cannot do. It means the central bank cannot promise to keep inflation at 2% all times and cannot give specific guidance about where policy is going.
But the bank must set policy so inflation is always converging towards 2% over the medium term and it must outline its “reaction function,” so firms and households will always know how a particular shock will impact policy.
The ECB president said:
We can be clear about our reaction function, and notably how we are likely to be affected by changing circumstances and what kind of data we will look at.
Meanwhile, Donald Trump appeared with Tesla founder Elon Musk at his side, to pick a Tesla from five vehicles parked on the White House driveway.
He said he would buy one to support Musk, whose electric car company’s shares tumbled by 15% on Monday, its worst one-day drop since 2020. There has been a backlash against the entrepreneur for his influence over the US government and the work of his cost-cutting task force, the Department of Government Efficiency (DOGE).
“I’m going to buy,” the US president said.
Number one, it’s a great product, as good as it gets—and number two, because @ElonMusk has devoted his energy and his life to doing this and I think he has been treated very unfairly… pic.twitter.com/6qrfwrbT0f
— Donald J. Trump (@realDonaldTrump) March 12, 2025
Naomi Smith, chief executive of the campaign group Best for Britain said the UK must respond to US tariffs with deeper EU ties.
Trump is waging trade war on America’s closest allies that will result in higher prices for ordinary people around the world.
The UK’s response must be to deepen ties with the EU which independent research shows will not only shield the UK and Europe from Trump’s tariffs, but deliver significant economic growth across Britain.
Lisa O’Carroll
European Commission president Ursula von der Leyen has been in touch with the taoiseach Micheál Martin over the weekend ahead of his meeting with Donald Trump today, European Commission officials have confirmed.
However they do not expect the taoiseach or any other leader to engage on trade negotiations as that is an EU competency, rather than a national one.
Donald Trump first doubled tariffs on Canadian steel and aluminium imports to 50% on Tuesday after Ontario introduced a 25% surcharge on electricity exports to the US. Then the US president backed down and suspended the plan.
But 25% levies on all global steel and aluminium imports into the US did come into effect, prompting a swift response from the European Union, which is imposing 25% tariffs on €26bn in US goods from April.
It’s unclear whether the UK will retaliate (certainly not imminently).
Neil Wilson, analyst at research platform TipRanks, is talking of “tariff fatigue”. He said about the UK:
It’s playing a longer game with Trump it seems. It’s exhausting keeping up with it all.
The market is tired too. It was a difficult day for traders on Wall Street [on Tuesday]. The S&P 500 ended the session 0.76% lower at 5,572.07. At the low of the day it was 10% below its record close – defined as a ‘correction’. The volatility index neared 30 to hit its highest in two and a half years. European stock markets opened higher on Wednesday.
Yesterday Citi downgraded US stocks to neutral and upgraded Chinese equities, noting that ‘US exceptionalism is at least pausing.’ In the longer term, they write, USequity outperformance may return when the AI narrative takes over again, but they expect US growth momentum to undershoot the rest of the world in the coming months.
It may be worth considering that the selling fatigue may start to kick in soon and there is ample room now for a rebound in both US equities and the dollar as sentiment can shift on a dime. Buy the dip is not gone.
On the data front today look out for US CPI inflation – expected +0.3% month-over-month for both the headline and core readings. The dollar is priced heavily to the downside view and risks therefore will be sensitive to anything hawkish. The Bank of Canada can afford to make another tariff-insurance cut today.
Lisa O’Carroll
Taoiseach Micheál Martin is meeting Donald Trump at 10am US time for the annual St Patrick’s Day celebrations, a week early this year because of congressional recess, my colleague Lisa O’Carroll reports from Dublin.
The Irish prime minister plans to tell Trump that the trade imbalance raised by secretary of state Marco Rubio in a phone call with the Irish foreign minister last week masks the complexity of the relationship.
He will point out that among Boeing’s biggest customers are Ryanair and Aercap, the world’s largest aircraft leasing company, which could now be impacted by tariffs.
Trump tariffs cover household goods e.g. tin foil
Like last time, in June 2018 when the first Trump administration imposed tariffs on global steel and aluminium imports, today’s 25% tariffs cover plenty of familiar household goods.
Different types of semifinished and finished products, such as steel pipes, wire and tin foil, are included.
The tariffs have been extended to other products, such as stainless steel cooking ware, window frames, doors, and goods only partly made from steel or aluminium, such as machinery, gym equipment and some electrical appliances.
You can read more on the European Commission’s explainer here.
In addition, the US secretary of commerce will establish today a system whereby the US will continue to extend the list of steel and aluminium derivatives products subject to additional duties of up to 25%.
The US tariffs will affect a total of €26bn of EU exports, which corresponds to about 5% of total EU goods exports to the US. Based on current import flows, this will result in US importers having to pay up to €6bn in additional import tariffs.
European stock markets rise amid hopes of ceasefire in Ukraine; dollar gains
European stock markets have risen at the open, lifted by hopes of a ceasefire in Ukraine, while the dollar has strengthened against a basket of major currencies.
The FTSE 100 index in London has gained 17 points, or 0.2%, to 8,513, while Germany’s Dax and France’s CAC both advanced by 0.9%, Spain’s Ibex rose by 0.6% and Italy’s FTSE MiB initially climbed by 1% and is now 0.86% ahead.
Ukraine said it was ready to accept an immediate 30-day ceasefire in the war with Russia, as the US announced it would immediately lift its restrictions on military aid and intelligence sharing after high-stakes talks in Saudi Arabia. This seems to have offset worries about the new US steel and aluminium tariffs in stock markets.
The dollar, which has been under a lot of selling pressure in recent days, has risen by 0.3% against rival currencies. Sterling has edged 0.15% lower to $1.2926 while the euro is down by a similar amount, but remains above the $1.09 level – at $1.0903.
In Asia, Japan’s Nikkei was broadly flat (up 0.07%) while Hong Kong’s Hang Seng fell by nearly 1% and Chinese exchanges edged about 0.2% lower. The Australian market lost 1.3%.
Susannah Streeter, head of money and markets at Hargreaves Lansdown:
As the ‘Trump bump’ has turned into a slump, investors are bracing for fresh volatility ahead. The impact of tariffs is front of mind, given broad 25% duties on imports of steel and aluminium have come into effect, with the risk of tit-for-tat retaliation high. China has already responded with higher duties on American goods and the EU is planning counter tariffs, which are expected to come into force in April.
The disquiet evident among investors on Wall Street, spread to Asia, with the Nikkei flat and Chinese indices in the red. London’s FTSE 100 [has seen] a small rebound, buoyed by hopes for a ceasefire in Ukraine. The easing of geopolitical concerns will help improve sentiment to some extent, but investors will still be mulling the impact of tariffs on global growth and prospects for multinationals in an increasingly complex trading world.
UK steel exporters are bracing for harsh winds to blow a storm through the industry, which has already been battered by higher energy costs, weaker demand, and over-supply on world markets.
You can follow the latest on Ukraine here:
