On Wednesday, the European Union (EU) announced new taxes on U.S. products like steel, aluminum, clothes, home appliances, and food. This was a quick response to President Trump’s decision to raise taxes on all steel and aluminum coming into the U.S. to 25%.
The EU, one of the world’s biggest trading groups, saw this coming and had a plan ready. But these new taxes are making things even tougher between Europe and the U.S., especially after Washington said last month that Europe needs to handle its own security going forward.
The EU’s taxes will affect $28 billion worth of American goods. It’s not just steel and aluminum—items like motorcycles, bourbon, peanut butter, jeans, and even soybeans from states like Louisiana will feel the hit. The EU picked these products to push back on the U.S., especially in areas that support Trump’s party, while trying not to hurt Europe too much.
### Why Is the EU Doing This?
The head of the European Commission, Ursula von der Leyen, said the EU is open to talking things out. “The U.S. put $28 billion in taxes on us, so we’re responding with $26 billion of our own,” she explained. The EU handles trade fights for its 27 countries.
She added, “We don’t think taxes like these are good for anyone. They’ll raise prices and cost jobs in both Europe and the U.S. We’re sorry it’s come to this—tariffs hurt businesses and people.”
Trump says his taxes will bring jobs to U.S. factories, but von der Leyen warns they’ll cause more harm than good.
### U.S. Businesses Want a Deal
The American Chamber of Commerce to the EU agrees that these taxes are bad news. They said both sides need to calm down and work out a deal fast, or it’ll hurt jobs and safety across the Atlantic.
### What’s Next?
This isn’t the first time this has happened. Back in Trump’s first term, he put taxes on EU steel and aluminum, and the EU hit back with taxes on things like motorcycles and jeans. This time, the EU has a two-step plan: starting April 1, they’ll bring back some old taxes from 2018-2020 that were paused under President Biden. Then, on April 13, they’ll add new taxes on $19.6 billion worth of U.S. goods.
Last month, EU Trade Commissioner Maroš Šefčovič went to Washington to try to stop this, meeting with U.S. trade officials. He said afterward, “The EU isn’t the problem here. We tried to avoid this, but it takes two sides to agree.”
### Steel Companies Worry
European steelmakers might lose big—up to 3.7 million tons of exports, says Eurofer, a steel group. The U.S. buys 16% of the EU’s steel, making it a key market.
Trade between the U.S. and EU is huge—about $1.5 trillion a year, or 30% of all global trade. The EU sells more goods to the U.S. than it buys, but the U.S. makes up for it by selling more services.
Meanwhile, Britain, which isn’t in the EU, said it won’t tax U.S. goods yet. British Business Secretary Jonathan Reynolds wants to keep working with the U.S. but didn’t rule out taxes later if needed.