Donald Trump’s decision to impose a 25% tariff on steel and aluminium has sparked further tensions in relationships across the Atlantic. EU leaders, including the President of the European Commission, Ursula von der Leyen, promise a decisive response, but so far the Community has not yet developed a consistent strategy in response to American duties. The question remains open as to whether the EU will retaliate with tariffs and how far U.S. trade policy will go.
A decision by President Donald Trump to impose a 25% tariff on steel and aluminium exported from Europe has taken many by surprise, said European Parliament member Michał Szczerba. Particularly given the magnitude of the industry, which provides over 300 thousand jobs and engages about 2 million people indirectly in the sector in Europe. Especially as Europeans, we must not be caught off guard. Strategic partnerships, especially in times of ongoing war, involve discussing such matters beforehand.
Trump during his first term, in 2018, decided to impose tariffs of 25% on steel and 10% on aluminium, but so far some countries have been partially exempt (Canada, Mexico and Brazil, and later also the European Union, Japan and Great Britain). However, on Monday 10th of February, the U.S. administration announced the introduction of tariffs on steel imported from all countries, without exception and exemptions, as well as the increase in the tariff rate on aluminium from the current 10 to 25 percent. Regulations signed by Trump bring these decisions to life from March 12th. Commentators suggest they are an attempt to stimulate domestic production and reduce the growing U.S. trade deficit.
The decision from Washington has caused further tensions in transatlantic relations and sparked wide debate about its consequences for economies on both sides of the Atlantic. European Commission President Ursula von der Leyen issued a brief statement declaring unconstitutional duties on the EU will not remain unanswered and will provoke decisive and proportionate remedial measures. She emphasised that the EU will act to protect its economic interests.
The United Nations must first and foremost maintain unity, adds European Member of Parliament Michał Szczerba. Economists estimate that the direct impact of American tariffs on the world economy will be relatively small, as steel and aluminium form a small part of global trade. Some experts also assess that they will mainly harm the U.S. themselves. “Tariffs on steel and aluminium will raise costs borne by U.S. manufacturers, not to mention raising financing costs and the dollar exchange rate. It is self-mutilation” – was the assessment made by former economic adviser to President Barack Obama and Harvard Professor, Jason Furman.
According to data from the American Iron and Steel Institute, in 2023 import accounted for just under a quarter of U.S. steel consumption, with the largest supplier to the U.S. being primarily Canada (about 6.5 million tonnes), which in 2019 was also responsible for nearly 80 percent of U.S. aluminium import. Therefore, of all trading partners, Canada is expected to suffer the most from U.S. tariffs.
In Poland, it is expected to have a marginal impact on exports. As estimated by the Polish Economic Institute, the value of sales of these products to the U.S. in 2023 was 207 million euros, similar to the previous year, which constituted less than 2 percent of exports to the U.S. and less than 0.1 percent of total Polish exports. Economists emphasise, however, that indirect effects need to be considered. The main recipient of Polish steel and aluminium are EU countries, but after March 12, other countries affected by Trump’s tariffs may also want to export to the EU market. For Poland, future American duties, such as those on the automotive sector, could also have significant economic importance.
