US-EU Trade War Escalates: Trump's Reciprocal Tariff Policy Sparks Tensions and Potential Retaliatory Measures in 2025
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US-EU Trade War Escalates: Trump's Reciprocal Tariff Policy Sparks Tensions and Potential Retaliatory Measures in 2025
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On April 2, 2025, President Trump announced the Reciprocal Tariff Policy in a Rose Garden press conference, following months of reviews by the US Trade Representative and Department of Commerce into what the administration labeled "harmful" nonreciprocal trade arrangements. As a result, beginning April 9, the US imposed a 20% country-specific tariff rate on imports of goods originating from the EU, a move that applied even to goods previously covered by free trade agreements, with the exception of the US-Mexico-Canada Agreement. The Trump administration indicated that these elevated tariffs could be reversed if the EU dismantled certain trade barriers identified in the 2025 National Trade Estimate report.
EU Commission President Ursula von der Leyen responded with a measured but firm tone, signaling the bloc’s readiness to negotiate for the removal of trade barriers but also preparing substantial countermeasures. The EU began finalizing a first package of responses targeting US tariffs on steel and is now considering broader measures to protect its interests and businesses in the event negotiations fail.
As of the latest data from US Customs and Border Protection, the 2025 EU Steel and Aluminum Tariff Rate Quota limits and usage show ongoing scrutiny and tight administration of quotas. The US currently maintains a global reciprocal tariff of 10% on most imports, while a scheduled increase to 20% on EU-origin goods has been temporarily paused until July 9 pending negotiation outcomes, according to the European Commission and Global Policy Watch. EU exports of autos and auto parts to the US already face a steep 25% tariff, and the US is contemplating further sector-specific tariffs on pharmaceuticals, semiconductors, critical minerals, and aerospace goods.
In response, the European Union formally launched consultations on possible new tariffs that could impact up to €95 billion of US imports, spanning various industrial and agricultural products. The Commission is also evaluating export restrictions on EU steel scrap and certain chemicals valued around €4.4 billion. While the EU’s countermeasures are not finalized, they may include export duties, quotas, or enhanced licensing requirements.
Both sides continue to cite willingness to negotiate, but recent economic forecasts from the European Commission warn that the protectionist stance is already dampening growth prospects. Tariffs are expected to weigh on both US and EU economies, with the threat of a tit-for-tat escalation fueling uncertainty and unsettling financial markets.
Listeners, as this high-stakes tariff standoff evolves, we’ll provide updates on every twist and turn. Thanks for tuning in, and don’t forget to subscribe so you never miss an episode. This has been a quiet please production, for more check out quiet please dot ai.
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