EU and Canada Retaliatory Trade Action

EU RETALIATORY TARIFF ACTION: On Tuesday, the EU announced a “two-step” response to recent U.S. trade actions. On 1 April, retaliatory tariffs to the United States’ tariff on steel and aluminum imports will be implemented. The scope of the EU’s first tranche of retaliatory tariffs will cover products listed in the previous 2018 and 2020 countermeasures, which were suspended after the EU and U.S. came to an agreement in October 2021 regarding the U.S.’ previous tariff on steel and aluminum. In response to new U.S. tariffs affecting more than 18 B EUR of EU exports, the EU will also develop a second list of products subject to retaliatory tariff that would come into force by mid-April, following a consultation process.

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Impact of EU Retaliatory Tariffs on U.S. Exports

• The first tranche of the EU’s retaliatory tariffs ranges from 10%-50%. The additional retaliatory tariffs do not target PMMI machinery tariff lines. The retaliatory list does include steel materials and inputs under Chapter 72 sourced from the United States.
• The second tranche of retaliatory tariffs is still in development, but the preliminary list of products under consideration does not target PMMI machinery tariff lines. However, the scope is quite broad and materials and inputs (such as iron and steel under Chapter 73) could be impacted.

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CANADA RETALIATORY TARIFF ACTION: On Wednesday, Canada announced the imposition of 25% retaliatory tariffs on $21 B of imports from the United States in response to U.S. steel and aluminum tariffs, despite the Trump administration’s reversed decision to increase tariffs on steel and aluminum imports from Canada to 50%. Effective 13 March, the scope of this tariff action includes steel and aluminum products, computers, sports equipment and cast-iron products. PMMI machinery tariff lines are not targeted, however, materials and inputs for machinery are included (e.g., steel under chapter 72).