Trump's recent declaration of steel tariffs outlined as a step too far?
US Raises Steel and Aluminum Tariffs by 50%, EU Ready with Countermeasures
In an unexpected move during trade negotiations with the EU, US President Donald Trump has announced a doubling of tariffs on steel and aluminum imports from 25 to 50 percent. This decision has brought forth concerns about a possible trade war.
Brussels and Washington have recently shown signs of hope that the escalating trade conflict could be avoided. After Trump's threat of a further tariff increase at the end of last week, he agreed to a conversation with EU Commission President Ursula von der Leyen for the first time on Sunday. However, the good conversation ended when the US President announced the steep increase in tariffs on Monday.
The EU Commission, responsible for the tariff negotiations, expressed its disappointment, saying the decision undermines ongoing efforts to reach a solution at the negotiating table. The EU is prepared to respond with countermeasures, which could be implemented even before the end of July.
Potential EU countermeasures include tariffs on a range of US products such as agricultural goods, machinery, and other significant trade items. The EU governments had already paved the way for initial counter-tariffs of between 10 and 25 percent in response to Trump's previous tariffs.
US President Trump justifies the tariffs as an attempt to correct alleged trade imbalances and secure US production sites. The additional fees for imports would strengthen the US steel industry, as said by Trump in a speech to employees of a steel plant in Pennsylvania on Friday.
However, the EU views the action and rationale behind the tariffs as incompatible with the rules of the World Trade Organization (WTO). The EU steel industry had already feared in January that further production capacities and jobs might have to be cut due to new US tariffs, with the USA being the second-largest market for European steel producers.
In theory, the EU and the US could agree to jointly address massive overcapacities on the global market, driven primarily by massive subsidies from China. Both sides are suffering greatly from dumping prices. However, the EU's response aims to protect its economic interests and maintain a balanced trade relationship with the US by reciprocating with equivalent measures.
[2] The EU may also consider diversifying trade partners and pursuing legal actions through international trade bodies like the World Trade Organization (WTO).
- The unexpected 50% increase in US tariffs on steel and aluminum imports has drawn both the industry and finance sectors into polarity, as the EU readies countermeasures, potentially leading to expansive consequences for the general-news arena.
- In the wake of the US's steep rise in tariffs on imported steel and aluminum, the EU is not only prepared to enact countermeasures but also contemplating diversifying trade partners and employing legal actions via international trade bodies such as the World Trade Organization (WTO), implicating politics in the midst of this intensifying trade conflict.
