EU countries set to approve first retaliation against US tariffs

EU countries are expected to approve on Wednesday the bloc's first countermeasures against US President Donald Trump's tariffs, joining China and Canada in retaliating and escalating a conflict that could become a global trade war.

The approval will come on the day that Trump's "reciprocal" tariffs on the EU and dozens of countries took effect, including massive 104% duties on China, extending his tariff onslaught and spurring more widespread selling across financial markets.

The 27-nation bloc faces 25% import tariffs on steel and aluminium and cars, as well as the new broader tariffs of 20% for almost all other goods under Trump's policy to hit countries he says impose high barriers to US imports.

The European Commission, which coordinates EU trade policy, proposed on Monday extra duties mostly of 25% on a range of US imports in response specifically to the US metals tariffs. It is still assessing how to respond to the car and broader levies.

The imports include motorcycles, poultry, fruit, wood, clothing and dental floss, according to a document seen by Reuters. They totalled about €21bn (R454.99bn) last year, meaning the EU's retaliation will be against goods worth less than the €26bn (R563.32bn) of EU metals exports hit by US tariffs.

They are to enter force in stages — on April 15, May 16 and December 1.

A committee of trade experts from the EU's 27 countries will vote on Wednesday afternoon on the Commission's proposal, which will only be blocked if a "qualified majority" of 15 EU members representing 65% of the EU population vote against.

That is an unlikely event given the Commission has already canvassed EU members and refined an initial list from mid-March, removing US dairy and alcoholic drinks.

Major wine exporters France and Italy had expressed concern after Trump threatened to hit EU wine and spirits with a 200% tariff if the EU went ahead with its planned 50% duty on bourbon.

Trump has already responded to Beijing's counter-tariffs announced last week, nearly doubling duties on Chinese imports. China has vowed to "fight to the end".

Reuters