EU Gears Up to Counter US Trade Protectionism

The European Union is preparing for a potential trade dispute with the United States while remaining open to negotiations, according to Bloomberg.

The EU's confidence in securing a favorable agreement has grown after US President Donald Trump postponed the imposition of tariffs on imports from Mexico and Canada. This decision has influenced the European Commission’s strategy in formulating a proportional response to Trump's tariff threats. However, a key challenge remains—establishing effective communication with the new US administration, as several critical trade positions in Washington are still awaiting Senate approval.

An insider revealed that the EU aims to prevent an escalation of tensions regarding steel and aluminum exports, an issue that could reach a critical point in March.

By the end of next month, the suspension of duties on approximately $3 billion worth of American goods is set to expire. The European tariffs on US imports were initially introduced during Trump’s first term in retaliation for US Section 232 tariffs on steel and aluminum. In 2021, both sides agreed to a temporary truce, and the EU extended its suspension of tariffs in December 2023. The US, in turn, extended the suspension of Section 232 tariffs—replacing them with a system of tariff quotas—until December 31, 2025.

According to the source, the EU is likely to extend its tariff suspension beyond March to avoid provoking the US administration and to maintain a constructive relationship.

Meanwhile, the European Commission has drafted a proposal to enhance US-EU relations. The plan includes increasing imports of liquefied natural gas (LNG), fertilizers, and weaponry. Other areas of cooperation could involve aligning policies on China, particularly in export controls, investment screening, and addressing Chinese overcapacity in steel production.

Trump has recently intensified his rhetoric on trade imbalances with the EU, citing the bloc’s significant trade surplus with the US. In response, the European Commission has vowed to take strong countermeasures if Washington proceeds with new tariffs.

The potential US tariffs on steel and aluminum could significantly impact global trade, as the United States consumed around 93 million tons of steel in 2023, with imports accounting for 13% of demand. Many of these imports originate from the country’s closest trading partners, making the issue a critical point of contention in transatlantic trade relations.