EU responds to Trump’s tariff war, targets Republican states; UK keeps options open

The European Union on Wednesday, 12 March, announced retaliatory trade action with new duties on US industrial and farm products, responding within hours to the Trump administration's increase in tariffs on all steel and aluminium imports to 25 per cent.

The world's biggest trading bloc was expecting the US tariffs and prepared in advance, but the measures still place great strain on already tense transatlantic relations. Only last month (February), Washington warned Europe that it would have to take care of its own security in the future.

Meanwhile, UK prime minister Keir Starmer — during the weekly Prime Minister’s Questions (PMQs) session in the House of Commons — said the UK will keep “all options on the table”.

Starmer had been asked by Liberal Democrat leader Sir Ed Davey about retaliatory moves, as he urged the prime minister to be “more robust” in the face of American trade tariffs that would impact many UK businesses.

The EU retaliatory measures, to start with, will cover goods from the United States worth some 26 billion euros (USD 28 billion) — and not just steel and aluminium products, but also textiles, home appliances and agricultural goods.

Also, motorcycles, bourbon whiskey, peanut butter and jeans will be hit again — as they were during President Donald Trump's first term as well.

The EU duties aim for pressure points in the US while minimising additional damage to Europe. The tariffs — taxes on imports — primarily target Republican-held states, hitting soybeans in House speaker Mike Johnson's Louisiana, but also beef and poultry in Kansas and Nebraska. Produce in Alabama, Georgia and Virginia is also on the list.

The EU moves to protect itself

European Commission president Ursula von der Leyen said in a statement that the bloc “will always remain open to negotiation”.

“As the US are applying tariffs worth 28 billion dollars, we are responding with countermeasures worth 26 billion euros,” she said.

The commission manages trade and commercial conflicts on behalf of the 27 member EU countries.

“We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs,” von der Leyen said.

Trump said his taxes would help create US factory jobs, but von der Leyen said: “Jobs are at stake. Prices will go up. In Europe and in the United States.”

“We deeply regret this measure. Tariffs are taxes. They are bad for business, and even worse for consumers. These tariffs are disrupting supply chains. They bring uncertainty for the economy,” she said.

UK disappointed, but ‘pragmatic’ on negotiation

The UK PM too expressed disappointment at the latest White House actions, which are designed to champion US manufacturing by making foreign-made products less attractive.

“On the question of tariffs, like everybody else I’m disappointed to see global tariffs in relation to steel and aluminium, but we will take a pragmatic approach,” Starmer told the British parliament.

“We are negotiating an economic deal which covers and will include tariffs if we succeed, but we will keep all options on the table,” he said.

His reply came soon after his secretary of state for business and trade Jonathan Reynolds issued a statement to say that Britain remained focused on “rapidly negotiating” a wider economic agreement with the US to eliminate additional tariffs and benefit UK businesses and economy.

“I will continue to engage closely and productively with the US to press the case for UK business interests. We will keep all options on the table and won’t hesitate to respond in the national interest,” said Reynolds.

Reynolds added that the government remained resolute in its support for UK industry. “This government is working with affected companies today, and I back industry’s application to the Trade Remedies Authority to investigate what further steps might be necessary to protect UK producers,” he added.

American business group urges talks

The American Chamber of Commerce to the EU said the US tariffs and EU countermeasures “will only harm jobs, prosperity and security on both sides of the Atlantic”.

“The two sides must de-escalate and find a negotiated outcome urgently,” the chamber said Wednesday.

Troubles closer to home?

The US businesspersons’ troubles are not just trans-Atlantic.

Amongst the prices affected by the new US tariffs are items as varied as cars and soft drink cans. Canada is the biggest exporter of both steel and aluminium to the US and expected to be the worst hit — and expected, equally, to hit back. Indeed, that war has already begun.

India, meanwhile, is in discussions with the US on a bilateral trade agreement, with the government indicating that it is braced against Trump's ‘tariff-friendly’ approach to trade.

External affairs minister S. Jaishankar was also asked about the issue during his visit to the UK earlier in March, and pointed to commerce and industry minister Piyush Goyal's visit to Washington to discuss a bilateral trade pact.

Goyal's trip followed discussions between Prime Minister Narendra Modi and Trump at the White House last month that had the POTUS still shaking his head over India's “very high” tariffs — even after the Indian budget plan had already pulled them down on things like imported cars (affecting, for instance, DOGE chief Elon Musk’s Tesla).

Intriguingly, this is simultaneous with Tesla sales crashing and a hit to its image both back home in the US and also its dwindling popularity in the EU.

What will actually happen?

This dance has played out before.

Trump slapped similar tariffs on EU steel and aluminium during his first term in office, which enraged European and other allies even then.

The EU also imposed countermeasures in retaliation at the time, raising tariffs on US-made motorcycles, bourbon, peanut butter and jeans, among other items.

This time, the EU action will involve two steps. First, on 1 April, the commission will reintroduce what it calls “rebalancing measures”, which the EU had from 2018 and 2020 but which were suspended under the Biden administration.

Then, on 13 April, come the additional duties targeting 18 billion euros (USD 19.6 billion) in US exports to the bloc.

EU trade commissioner Maroš Šefcovic travelled to Washington in February 2025 in an effort to head off Trump’s new tariffs, meeting with US commerce secretary Howard Lutnick and other top trade officials.

He said on Wednesday that it became clear during the trip “that the EU is not the problem”.

“I argued to avoid the unnecessary burden of measures and countermeasures, but you need a partner for that. You need both hands to clap,” Šefcovic told reporters at the European Parliament in Strasbourg, France.

The European Union (EU) has already retaliated after President Ursula von der Leyen said tariffs bring uncertainty for the economy.

Von der Leyen had said that the EU retaliatory tariffs were “strong but proportionate” and that the EU remains “open to negotiations”.

Still, European steel companies must brace for losses

The EU could lose up to 3.7 million tonnes of steel exports, according to European steel association Eurofer. The US is the second biggest export market for EU steel producers, representing 16 per cent of the total EU steel exports.

The EU estimates that annual trade volume between both sides stands at about USD 1.5 trillion, representing some 30 per cent of global trade. While the bloc has a substantial export surplus in goods, it says that is partly offset by the US surplus in the trade of services.

With PTI, AP inputs