Plans for the Trump administration to hit the European Union with steel and aluminum tariffs could be announced as early as Thursday, reports the Wall Street Journal citing people familiar with the matter.
Why it matters: The EU has threatened retaliatory tariffs on U.S. products such as “motorcycles, jeans and bourbon.” The report follows Commerce Secretary Wilbur Ross’ criticism that the European Union isn’t negotiating on trade thanks to the United States’ steel and aluminum tariffs, citing China as a counterexample.
What to expect: If the tariffs go through, you’ll see domestic and imported steel and aluminum prices spike because the EU is a top supplier.
The EU will likely retaliate almost immediately. They’ve already filed what they plan to do — their list of retaliatory measures — at the World Trade Organization (WTO.) The EU’s big public threats are tariffs on Harley Davidsons and Kentucky whiskey (targeting Paul Ryan and Mitch McConnell respectively.)
The snowball effect: The U.S. imposing tariffs would likely have seriously negative effects. Until now, the only country that has directly retaliated against the U.S. on these steel and aluminum tariffs is China. Add in to the mix other countries who have made threats but haven’t retaliated — yet.