The European Union has announced a new range of retaliatory tariffs against the United States, in response to the U.S. revoking the EU’s exemption from steel and aluminum tariffs.
Why is the EU retaliating?
On March 1, President Donald Trump announced that the United States would be imposing a 25 percent global tariff on all steel imports to the U.S. and a 10 percent global tariff on all aluminum imports. However, he gave temporary exemptions to a handful of countries, including Canada, Mexico, and the European Union trading bloc.
On May 31, the White House announced that it would be ending the exemptions at the end of that day.
Soon after the tariffs were first announced, the European Union had promised to retaliate with tariffs on a range of American products including things like blue jeans, bourbon, and motorcycles, if the tariffs were ever imposed on the EU.
What tariffs is the EU imposing?
The tariffs will hit $3.2 billion in U.S. imports to the European Union. The products affected will include cigarettes, denim, peanut butter, orange juice, blue jeans, bourbon, and motorcycles.
EU trade official Cecilia Malmström said that the EU “did not want to be in this position,” but that it had no choice.
“The unilateral and unjustified decision of the U.S. to impose steel and aluminum tariffs on the EU means that we are left with no other choice,” she said.
What happens next?
The EU said that if the situation isn’t resolved, or if the U.S. responds with more tariffs, the EU said that it will add additional tariffs on 160 U.S. products worth $4.3 billion.
The EU has also filed a case contesting the legality of the U.S. tariffs with the World Trade Organization.
Mexico and Canada have also imposed retaliatory tariffs on the United States. Canada declared a tariff up to 25 percent on $13 billion on U.S. products, while Mexico imposed its on tariffs on $3 billion worth of imports.
Canada, Mexico, and the EU aren’t the only countries involved in a tariff standoff with the U.S. On Monday, the U.S. threatened additional tariffs on $200 billion in imports from China, which would bring the total number of tariffs on that country up to $450 billion. So far, China has met every U.S. tariff with an equal tariff of its own.