As reported in our earlier blog here, on Monday 10 February 2025, President Trump announced that 25% tariffs will be imposed on all steel and aluminum products imported into the United States (“US”), including from the EU and the UK which were previously subject to exclusions. These tariffs are due to come into effect on 12 March 2025.
The key question now is how other jurisdictions such as the EU and the UK will retaliate.
This morning, the EU’s President von der Leyen posted a statement in which she stated that she deeply regrets the US decision to impose tariffs on EU steel and aluminum exports and that the unjustified tariffs will not go unanswered. They will trigger firm and proportionate measures. The statement can be found here.
As of the time of publication of this blog, there has been no official response from the UK government.
How do we expect the EU respond will respond to s.232 tariffs?
We expect that the EU will reinstate existing retaliatory tariffs that are currently suspended until 31 March 2025. In absence of Commission Implementing Regulations to prolong the suspension, these tariffs, in addition to those never implemented, will automatically reapply. The EU could also decide to implement these tariffs earlier e.g. as early as 12 March 2025. These tariffs include:
- US-origin products listed in Annex 1 and 2 of Implementing Regulation (EU) 2018/724 (which can be found here), with tariffs up to 50%; and
- A much shorter list of US-origin products listed in Implementing Regulation (EU) 2020/502 ((which can be found here), with tariffs up to 20%.
Additionally, the EU is currently reviewing the steel safeguard measures imposed back in July 2018 (and extended twice and due to apply until 30 June 2026) as a response to the Section 232 tariffs introduced by the US in 2018. We expect that these safeguard measures may be expanded as a result of the US Section 232 tariff announcement.
How do we expect the UK respond will respond to s.232 tariffs?
We expect that the UK Secretary of State would exercise its statutory powers under Section 15(1) of the Taxation (Cross-border Trade) Act 2018 (see here) to impose any retaliatory tariff measures against US imports. This may take a similar shape as any response that the EU may deploy (see above). Pursuant to the said provision, the Secretary of State is not required to conduct any public consultation process or obtain the approval of the UK Parliament. As such, any retaliatory tariff measures imposed by the UK can enter into force almost immediately on the date of publication of the relevant regulation although, based on experience, we expect that there will be a short grace period between publication of the regulation and entry into force.
The UK is expected to adopt a similar approach as the EU with regards to current steel safeguard measures.
How can businesses prepare
· Businesses should be aware of their import and export volumes in the US and the EU/UK, broken down by products and current tariff rates. This allows businesses to quickly calculate possible impacts on additional customs duties in both regions, focusing in the case of EU and UK imports, as a first step on the products targeted by the lists mentioned above.
· Based on possible impacts, mitigation strategies should be taken into consideration (e.g. unbundling of transfer prices to optimize customs values, reviewing the use of customs procedures and Free Trade Agreements). Note that the EU and the UK have specific anti-circumvention measures that should be taken into consideration when considering changes in supply chains (e.g. relocation of production) as a tariff mitigation measure. For further information, please see our prior blog post on the CJEU ruling here.
