EU-US tariff war: tariffs are bad for companies, even worse for consumers

Trump’s Tariffs

President Donald Trump has announced a 25 percent tariff on all steel and aluminium products entering the United States and has indicated that other industries could be affected. In an interview on Monday, he also threatened tariffs of 50 to 100 percent on imported cars, which could deal another blow to the European economy.

EU Plans Response

Von der Leyen indicated that the EU will not remain idle in the face of “unjustified tariffs.” He promised strong and proportionate countermeasures, stressing that the EU would use all means to protect its economic interests, workers, companies and consumers.

Although the Commission President did not elaborate on what kind of response the EU was preparing, a similar situation has already occurred in the past. In 2018, during Trump’s first presidency, steel and aluminum tariffs were already introduced, to which the EU responded with counter-tariffs. However, these were suspended in 2022 after an agreement was reached with the Biden administration. The suspension of EU tariffs was extended until the end of March this year, but with the announcement of new tariffs, they could be on the agenda again.

Affects all EU member states

The European Union operates as a customs union, so the tariffs announced by Trump apply to all EU member states, including Hungary. Similarly, any possible EU response will affect the entire union uniformly.