The Looming Escalation: EU Commissioner Warns of Hefty New US Tariffs
U.S. tariffs escalate concern within EU, as a commissioner issues a stern alert - US Commission official issues alarm over anticipated escalated tariffs from Europe
EU Trade Commissioner Maros Sefcovic issues a warning about potential forthcoming US tariffs on EU goods. The US is currently running several investigations, invoking national security concerns, according to Sefcovic's address at the European Parliament in Strasbourg. If these probes culminate in tariffs, an additional $170 billion worth of exports would face the brunt.
This would amount to approximately $549 billion worth of EU exports to the USA being hit by tariffs, said Sefcovic. He deemed that as "massive." As per the EU Commission, the US investigations concern semiconductors, pharmaceuticals, and raw materials.
- Trade Tensions
- Tariffs
- USA
- Semiconductors
- Pharmaceuticals
- Raw Materials
Deep Dive: Understanding the Fraying Relations
Though specific investigations related to semiconductors, pharmaceuticals, and raw materials aren't explicitly specified in current events, these sectors play a crucial role in broader trade deliberations. The ongoing trade feud involves tariffs on steel, aluminum, automobiles, among other sectors.
Unfolding Scenarios and Tariffs
- Tariffs on Steel and Aluminum: The US has levied 25% tariffs on steel and aluminum imports using Section 232 of the Trade Expansion Act of 1962. This move prompted the EU to impose countermeasures worth about 18 billion euros on US products, which were later held in abeyance for 90 days to allow for talks[4][5].
- Reciprocal Tariffs: On April 2, 2025, the US instated a 10% "reciprocal" tariff on most imported goods, with exceptional exemptions for certain products like pharmaceuticals and electronics (including semiconductors)[1][5].
- Exemptions and Special Measures: Semiconductors and pharmaceuticals were initially spared from additional tariffs, albeit sector-specific measures may soon be announced[1].
- Raw Materials: No additional tariffs have been proposed for refined and raw mineral products thus far[1].
The Bite of Extra Tariffs
- Economic Repercussions: High tariffs could lead to substantial impacts on macroeconomic indicators, trade dynamics, and the global value chain structure. These tariffs could potentially disrupt supply chains and inflate costs for consumers and businesses across both regions[1].
- Trade Disputes: The EU's bid to join a WTO dispute over US tariffs on steel and aluminum was rebuffed by the US, signaling continued strife in trade relations[3].
- Negotiations and Temporary Reprieves: The suspension of EU countermeasures opens up a window for negotiations, signaling an effort to resolve or mitigate the fallout from these trade tensions[4][5].
Investigations and Looming Probes
Though no explicit investigations surrounding semiconductors or pharmaceuticals are mentioned in recent developments, continued trade tensions could ignite heightened scrutiny in these sectors due to their strategic significance. Raw materials have been so far untouched by new tariffs, but this could change as trade policies shift.
- The EU Trade Commissioner Maros Sefcovic warns of potential hefty new tariffs on EU goods by the US, which could amount to approximately $549 billion worth of EU exports to the USA being hit.
- The US investigations concerning semiconductors, pharmaceuticals, and raw materials play a crucial role in broader trade deliberations.
- The US has levied 25% tariffs on steel and aluminum imports, which prompted the EU to impose countermeasures worth about 18 billion euros on US products.
- On April 2, 2025, the US instated a 10% "reciprocal" tariff on most imported goods, with exceptions for certain products like pharmaceuticals and electronics (including semiconductors).
- High tariffs could lead to substantial impacts on economic indicators, trade dynamics, and the global value chain structure, with potential disruptions to supply chains and cost inflation for consumers and businesses across both regions.
- Continued trade tensions could ignite heightened scrutiny in the sectors of semiconductors and pharmaceuticals due to their strategic significance, and raw materials could soon be targeted as trade policies shift.