In a retaliatory action, the European Union has announced new tariffs on $28.3 billion worth of US products in response to America’s latest metal tariffs.

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The decision was made on Wednesday, just hours after the US imposed a 25% tax on steel and aluminum imports, increasing tensions between the two sides. The EU will now consult its member countries, with the new tariffs expected to take effect by mid-April.

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EU condemns tariffs as 'harmful to businesses and consumers'

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European Commission President Ursula von der Leyen criticised the US decision, warning of its economic impact. “We firmly believe that in a world fraught with geo-economic and political uncertainties, it is not in our common interest to burden our economies with such tariffs,” she told reporters.

She further emphasised the negative consequences, saying, “Tariffs are taxes. They are bad for business, and even worse for consumers… Jobs are at stake. Prices will go up. In Europe and in the United States… The countermeasures we take today are strong but proportionate.”

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What the EU’s tariffs will target

The EU’s response will be much stronger than its last trade fight with Trump in 2018 when the US imposed tariffs on about $7 billion of European metals.

This time, the EU will target US steel, aluminum, textiles, farm products, and household appliances. It will also bring back tariffs on products previously hit during past trade disputes, such as bourbon, boats, and motorbikes.

Meanwhile, Trump has announced new US tariffs, set to start in early April. These will focus on European goods, especially cars, as part of a response to EU trade policies, including its value-added tax.

Also read: Trump to double tariff on Canada steel, aluminum to 50%, to declare 'National Emergency on Electricity'

Failed negotiations and history of trade disputes

EU trade chief Maros Sefcovic recently visited Washington to negotiate with senior US officials, including Commerce Secretary Howard Lutnick. He offered to lower tariffs on industrial goods, particularly cars, one of Trump’s key demands, and increase Europe’s imports of US liquefied natural gas and defence equipment.

However, after talks failed, Sefcovic voiced disappointment, saying, “The disruption caused by tariffs is avoidable if the US administration accepts our extended hand and works with us to strike a deal. We are ready to negotiate.”

The conflict between the US and EU over metal tariffs began in 2018 when Trump first imposed taxes on European steel and aluminum, claiming national security concerns. The EU rejected this argument and responded with tariffs on politically important American goods, such as Harley-Davidson motorcycles and Levi’s jeans.

Also read: How Donald Trump's 'tremendous resentment for Japan' fueled his tariff obsession

In 2021, both sides agreed to a temporary truce. The US eased some tariffs, replacing them with limits on metal imports, while the EU suspended its countermeasures.

Now, all those suspended tariffs, covering about $8 billion worth of US goods will return at the end of March. Some new tariffs that were never used before will also be introduced.

(With inputs from agencies)