While the US reached an agreement with South Korea, Australia, Argentina and Brazil shortly after tariffs were announced in 2018, other countries opted for retaliation. In June 2018, the EU responded to the US Section 232 tariffs on steel and aluminium with immediate retaliatory countermeasures in the range of 10-25% on motorcycles, agricultural products, bourbon, clothes, and steel, amongst others. Additional countermeasures were to be imposed after three years if no settlement was reached.
Then, on 31 October 2021, the US and the EU announced a multifaceted agreement to address the tariffs imposed during the Trump administration, replacing tariffs with a tariff rate quota (TRQ) system, allowing a certain volume of EU steel and aluminium to enter the US market duty-free. Any imports above these quotas would be subject to the original tariffs. The EU also agreed to suspend its retaliatory tariffs on various US exports, including American whiskey and motorcycles until 31 March 2025, while the US prolonged the TRQs on EU products until 31 December 2025.
This time around, even before the new tariffs were officially announced, the European Union issued a statement condemning any potential additional tariffs coming from the US. If the EU is hit by additional tariffs from March, it could simply reinstate its retaliatory tariffs on US exports.
And, if history is anything to go by, EU policymakers will not be the only ones opting for retaliation.
