EU Prepares Countermeasures as US Imposes 50% Steel Tariffs

Subscribe to our free newsletter today to keep up to date with the latest manufacturing news.

Trade tensions between the European Union and the United States are once again nearing a boiling point. The US administration’s decision to impose a 50% tariff on imported steel has prompted a swift and calculated response from Brussels. European officials have signaled that if diplomatic negotiations falter, the bloc is prepared to retaliate with tariffs targeting as much as €95 billion in US goods.

EU’s response to US tariffs

The European Commission is finalizing a list of countermeasures that could be enacted as early as July 14. The move is a direct reaction to what EU officials describe as unjustified and protectionist measures by Washington. These retaliatory tariffs are expected to target a diverse array of US exports, from industrial components to consumer goods, aiming to apply pressure where economic pain would be most keenly felt.

The 50% tariff on steel imports, which took effect on short notice, is reminiscent of trade tactics employed during the Trump administration. Brussels sees this not only as a regression from previously negotiated agreements but as a destabilizing force in the already complex global trade environment. The European Commission’s trade office has confirmed that consultations with member states are underway to finalize the targeted sectors and product categories most vulnerable to disruption.

Ongoing trade negotiations

Efforts to avert a full-scale trade war are still underway. EU Trade Commissioner Maroš Šefčovič and US Trade Representative Jamieson Greer are in active talks, with meetings held in Paris over the past week. The European side has offered several concessions in an attempt to de-escalate the situation. These include increased imports of US liquefied natural gas and expanded defense procurement contracts, intended to bolster transatlantic cooperation without compromising core EU trade policies.

However, a central point of contention remains: the EU’s value-added tax system and access to the European market for US agricultural products, particularly beef. While the US is pressing for broader access and a reduced VAT impact on exports, European negotiators are resisting changes that could undermine regulatory standards or public support within the bloc.

A long-standing EU proposal for a “zero-for-zero” agreement, eliminating tariffs on industrial goods from both sides, remains on the table but has been rejected by the US. This impasse underscores a broader disagreement about the direction of future trade policy and the willingness of each party to compromise on foundational economic principles.

Potential economic impact

The immediate economic consequences of the new tariffs are already rippling through key sectors. For manufacturers, higher steel prices threaten to raise production costs significantly, especially in industries such as automotive, machinery, and construction. These costs may ultimately be passed on to consumers, compounding inflationary pressures that both economies have been struggling to contain.

Retailers and logistics firms are also bracing for disruptions. Extended delivery times and increased import costs are likely to affect supply chains that depend on seamless cross-border flows of raw materials and components. In the longer term, persistent tariffs could reduce investment, particularly among companies reliant on transatlantic trade as a growth engine.

For the US, the risk lies in potential political backlash from affected industries and a fragmented approach to global trade policy. For the EU, retaliatory measures could escalate into a broader trade conflict at a time when its economic outlook remains fragile, particularly in Germany and Italy, where manufacturing continues to face structural headwinds.

Whether the EU and US can reach an accord before the July deadline remains uncertain. Diplomatic overtures continue, but the margin for compromise is narrowing. With elections looming in both the EU and the US, political incentives to appear tough on trade may outweigh the benefits of conciliation.

Sources:

• AP News