The European Union agrees on a first set of countermeasures targeting $28 billion worth of U.S. imports. - Reuters

The European Union agrees on a first set of countermeasures targeting $28 billion worth of U.S. imports. - Reuters

The European Union has announced its first set of countermeasures in response to the recent U.S. tariffs on steel and aluminum products. The EU's response, which was agreed upon on March 12, 2025, aims to protect European businesses, workers, and consumers from the impact of these trade restrictions.

The EU's countermeasures are twofold: first, the suspension of existing 2018 and 2020 countermeasures against the U.S. will lapse on April 1, 2025. These countermeasures were initially implemented to respond to the economic harm caused to €8 billion of EU steel and aluminum exports. Second, the EU is introducing a new package of countermeasures targeting U.S. exports worth up to €26 billion, matching the economic scope of the U.S. tariffs.

The new countermeasures, which are expected to come into force by mid-April, will be the result of a two-week consultation period with EU stakeholders. The consultation process, which began on March 12, aims to ensure that the right products are chosen for inclusion in the new countermeasures, minimizing disruption to EU businesses and consumers.

The EU's response is a proportionate and swift reaction to the U.S. tariffs, which have been criticized by EU officials as a "major blow" to the world economy. The new U.S. tariffs, which include an increase from 10% to 25% on aluminum and the extension of tariffs to other products, will affect a total of €26 billion of EU exports, corresponding to approximately 5% of total EU goods exports to the U.S.

The EU's countermeasures are expected to have significant economic implications for both the EU and the U.S. The U.S. Secretary of Commerce has been tasked with establishing a system by May 12, 2025, to continue extending the list of steel and aluminum derivative products subject to additional duties of up to 25%.

The EU's response highlights the ongoing trade tensions between the two economic blocs. While the EU has expressed its willingness to work with the U.S. on a longer-term solution, it has also warned that further protectionism could have dire consequences for the global economy. The EU's countermeasures are a clear indication of its resolve to defend European interests in the face of U.S. trade restrictions.

As the consultation process continues, financial professionals and investors should closely monitor the developments, as the EU's countermeasures could have significant implications for global trade dynamics and market sentiment. The EU's response underscores the importance of maintaining a balanced and fair global trading system, and the potential consequences of unilateral trade actions.