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By Hugh Cameron
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France has vowed to respond to U.S. President Donald Trump's new tariffs on metal imports into the United States, reviving the transatlantic trade dispute that took place during Trump's first term.
Newsweek has contacted the European Commission for comment via email.
Why It Matters
The warning suggests that the European Union may have a forceful response to Trump's incoming measures, and it is likely to stoke existing fears over an imminent "tariff war" between the U.S. and the critical trading bloc.
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Retaliatory tariffs could raise the price of steel and aluminum domestically and increase the cost of goods commonly exported to Europe from the U.S.—including oil and gas, pharmaceuticals, and manufacturing equipment.
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What To Know
On Monday, French Minister for Europe and Foreign Affairs Jean-Noël Barrot called on the European Commission to launch its own round of tariffs against the U.S., in response to Trump's recent pledge to impose 25 percent duties on all steel and aluminum coming into the country.
"[The European Commission] has assured us that it would have been ready to [react] when the time comes," Barrot told French broadcaster TF1*.* "The time has come."
Trump announced the new tariffs on Sunday while traveling aboard Air Force One to the Super Bowl in New Orleans. When reporters asked which countries would be affected by the new tariffs, he replied, "Everybody." The president had previously hinted at tariffs on the EU in response to long-term trade imbalances.
"They don't take our cars. They don't take our farm products. They take almost nothing, and we take everything from them. Millions of cars, tremendous amounts of food and farm products," the president told reporters last week.
After China, the U.S.'s largest trade deficit is with the EU, according to a recent report from the Bureau of Economic Analysis. In December, the U.S.'s overall trade balance reached a deficit of $98.4 billion.
Trump pursued similar tariffs during his first term. In 2018, he imposed 25 percent duties on steel imports and 10 percent on aluminum imports from the EU and countries such as Turkey, Brazil, Norway and South Korea.
The European Commission adopted "rebalancing measures" in response, imposing retaliatory tariffs on 2.8 billion euros' worth of U.S. imports that included food and drinks. It suspended the measures during the Biden administration.
"This is already what Donald Trump had done in 2018, and at the time we had replied, so this time we will reply again in the same way," the French foreign minister said on Monday.
Polish Prime Minister Donald Tusk said last week, "We have to do everything to avoid this totally unnecessary and stupid tariff war." He added that the economic pressures from the U.S., a long-standing ally, had created a "cruel paradox," given the existing threats to the Continent posed by Russia and "Chinese expansion."
German Chancellor Olaf Scholz said during a debate on Sunday, as his country prepares for snap elections on February 23, that the EU could respond "in an hour" if Trump followed through on his tariff threats.
What People Are Saying
The European Commission said in a statement on Monday: "The imposition of tariffs would be unlawful and economically counterproductive, especially given the deeply integrated production chains the EU and U.S. established through transatlantic trade and investment. Tariffs are essentially taxes. By imposing tariffs, the U.S. would be taxing its own citizens, raising costs for business, and fueling inflation."
President Donald Trump said on Sunday: "Any steel coming into the United States is going to have a 25 percent tariff. Aluminum, too."
Cecilia Malmström, a senior fellow at the Peterson Institute for International Economics, wrote on February 3: "The transatlantic relationship is an important one, but there are other actors in the world as well. The best line of defense for the European Union is a stronger economy that can generate its own growth to a larger extent. This could be Europe's moment if it finally does its homework."
Stéphane Dion, the Canadian ambassador to France and special envoy to the EU, said in a speech to the Canada-France Inter-parliamentary Association on Wednesday: "If the Trump administration persists in wanting to close their market to us, let's further develop the links between our economies. As you know, Canada is a reliable partner that respects rules and treaties. In the future, France and Europe will need to secure new outlets to offset the harmful effects of any American tariffs. I'm absolutely convinced that we need to step up our exchanges to strengthen the transatlantic link."
What Happens Next
Global steel and aluminum prices have not yet reacted to the new tariffs, which Trump said would take effect on Monday.
In response, the EU could target the U.S. tech sector using its anti-coercion instrument, which gives Brussels the power to impose tariffs and limit access to European markets in retaliation to coercive trade measures.
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