Trump's new tariff announcement: what politics and business think of it

How is the EU reacting to the announcement?

It warned Trump against introducing the new tariffs. "The EU sees no justification for imposing tariffs on its exports," said the EU Commission. "We will act to protect the interests of European companies, workers and consumers from unjustified measures."

A spokesperson for the German Ministry of Economic Affairs said that tariffs would hit the German export-oriented economy. The EU and the German government are continuing to work to ensure that this does not happen. At the same time, preparations have been made for the worst-case scenario.

Hasn't Trump already introduced such special tariffs once before?

Yes, in 2018 during the Republican's first term of office. At that time, surcharges of 25 percent were imposed on imports of steel products and 10 percent on imports of aluminum products.

According to EU calculations, annual European steel and aluminum exports worth a total of 6.4 billion euros were affected at the time. According to the German Steel Federation, EU exports to the USA halved at the time - from 5.2 million tons in 2018 to 2.5 million tons in 2020.

How did the EU react?

With retaliatory tariffs on US products such as jeans, bourbon whiskey, motorcycles and peanut butter. Trump justified the special tariffs "with national security interests". The EU found this implausible and assumed that the aim was to protect the US economy from unwanted competition.

In the fall of 2021, the EU reached a standstill agreement with the administration of Trump's Democratic successor Joe Biden, which resulted in the tariffs being largely suspended. However, a final agreement has not yet been reached. The standstill agreement runs until March 31.

What quantities are involved?

According to US figures, EU companies exported 3.64 million tons of steel products to the United States in 2023. The volume of aluminium products was stated at 289,000 tons across the EU for 2022.

What will happen if the new US tariffs really do come?

According to the EU, it sees no justification for imposing tariffs on its exports. According to German Chancellor Olaf Scholz (SPD), it will react immediately. "We are prepared for this," said the SPD politician on Sunday evening during the TV duel with CDU/CSU chancellor candidate Friedrich Merz. "We can act within an hour as the European Union."

France's Foreign Minister Jean-Noël Barrot told TF1: "There is no hesitation when it comes to defending our interests." The EU Commission will "define the sectors that will be the subject of these retaliatory measures."

What exactly is planned?

In order to make it difficult for the US President to make concrete calculations, the EU does not want to comment on this publicly. What is certain is that the currently suspended special tariffs on US products such as jeans, bourbon whiskey, motorcycles and peanut butter will be reintroduced immediately.

Depending on the extent of the US measures, they would also be supplemented by further new special duties. Ideally, the EU's reaction would be so far-reaching for US manufacturers that it would force Trump to the negotiating table, where an amicable solution could then be found.

What could the EU offer Trump?

According to EU Commission President Ursula von der Leyen, the European Union and Trump could, for example, strike a new deal to expand American exports of liquefied natural gas (LNG). "We still get a lot of LNG from Russia, so why not use American LNG instead, which is cheaper for us and lowers our energy prices," said the German politician after a phone call with Trump following his election.

It would also be possible to import more military technology and agricultural goods from the USA and reduce import tariffs on US cars. At ten percent, these were recently significantly higher than the US tariff rate of 2.5 percent.

Can the World Trade Organization (WTO) prevent such tariffs?

WTO members who feel unfairly treated by tariffs can file a complaint there. Whether this is useful is another question, says Joost Pauwelyn, professor of economics at the Geneva University Graduate Institute: "An EU complaint against the USA in the WTO is useless because the USA blocks everything. The appellate body in the dispute settlement procedure is vacant because the US has been preventing the appointment of new judges for years. If they lose a case, they usually appeal anyway and the case remains up in the air."

Did the WTO not take action on the Trump tariffs of 2018?

In fact, some countries successfully complained to the WTO. Others, such as the EU, achieved exemptions in negotiations with the USA. The WTO declared the tariffs unlawful. It rejected the US argument that it was a matter of national security. "But the fact that the WTO Dispute Settlement Committee took four years to reach a result, as it did with the complaints against the US tariffs on steel during Trump's first term, is a disgrace," says Paulwelyn. "He is making himself superfluous. He should act much faster.