Europe Strikes Back

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The European Union on Wednesday announced retaliatory trade action with new duties on U.S. industrial and farm products, responding within hours to the Trump administration’s increase in tariffs on all steel and aluminum imports to 25%.

The world’s biggest trading bloc was expecting the U.S. tariffs and prepared in advance, but the measures still place great strain on already tense trans-Atlantic relations. Only last month, Washington warned Europe that it would have to take care of its own security in the future.

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The EU measures will cover goods from the United States worth around 26 billion euros ($28 billion), and not just steel and aluminum products, but also textiles, home appliances and agricultural goods. Motorcycles, bourbon, peanut butter and jeans will also be hit, as they were during U.S. President Donald Trump’s first term.

The EU duties aim for pressure points in the U.S. while minimizing additional damage to Europe. EU officials have made clear that the tariffs — taxes on imports — are aimed at products made in Republican-held states, such as beef and poultry from Kansas and Nebraska and wood products from Alabama and Georgia. Yet the tariffs will also hit blue states such as Illinois, the No. 1 U.S. producer of soybeans, which is also on the list.

Spirits producers have in essence become collateral damage in the dispute over steel and aluminum. The EU move “is deeply disappointing and will severely undercut the successful efforts to rebuild U.S. spirits exports in EU countries,” said Chris Swonger, head of the Distilled Spirits Council. The EU is a major destination for U.S. whiskey, with exports surging 60% in the past three years after an earlier set of tariffs was suspended.

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