Trump's tariffs: is EU's retaliation the best move?

Contents

Donald Trump’s worldwide tariffs on steel and aluminium imports into the US have come into effect today: a 25% levy “with no exceptions or exemptions”.

The EU immediately imposed (potentially masochistic) counter-tariffs. But the UK – which had fervently hoped to be the exception to Trump’s tariff rule – is taking a “pragmatic” approach” to the “disappointing” move. Britain is “rapidly negotiating a wider economic agreement with the US”, and will keep “all options on the table”, said business and trade secretary Jonathan Reynolds.

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

The EU has “hit back hard”, said Politico and announced a “two-stage retaliation” targeting €26 billion (£22 billion) in US goods, starting in April, and including “iconic” American products such as bourbon and Harley-Davidson motorbikes. “This matches the economic scope of the US tariffs,” said European Commission President Ursula von der Leyen in a statement this morning. “We deeply regret this measure,” she added. Tariffs are “bad for business, and even worse for consumers”.

ALSO READ Liz Truss gives off brief speech to set Tory hearts racing in leadership race

The inclusion of Britain in the steel tariffs is certainly a “blow” to Keir Starmer and his new ambassador to the US, Peter Mandelson, said The Independent. The pair had been “negotiating hard” for the UK to be spared. Britain has been “dragged into the US trade war despite claims from Brexiteers” that being outside the EU would protect the country. But the government has so far “resisted” immediate retaliatory action.

ALSO READ The Guardian view on the UK recession: no growth and no ideas either | Editorial

In that scenario, the US “has the upper hand”, said Karen Karniol-Tambour, of investment management company Bridgewater Associates, in The New York Times. Trump’s view is that America’s large trade deficits (it consumes much more than it produces) are “a threat to national wealth and strength”. It has “more imports to tariff than exports”, and it also “has more to gain” if US companies respond by “bringing supply chains back home”.