EU’s von der Leyen vows response to Trump’s 20pc tariffs

European Commission President Ursula von der Leyen has warned the global economy would ‘massively suffer’ from a trade war.

European Commission President Ursula von der Leyen tours the Registan cultural site on April 3. Picture: AFP

European Commission President Ursula von der Leyen vowed to respond to US President Trump’s latest round of levies on foreign imports, calling them “a major blow to the world economy.”

“The global economy will massively suffer,” she said at a press conference in Uzbekistan on Thursday. “Uncertainty will spiral and trigger the rise of further protectionism. The consequences will be dire.”

In a watershed moment for global trade, Trump unveiled a plan combining universal tariffs and country-by-country rates on Wednesday, including a 10u per cent levy across-the-board on all imports and individualized additional tariffs on around 60 countries he believes treat the US unfairly. That includes a 20 per cent tariff on EU goods.

The EU chief said the bloc is ready to respond, with a measure to address the steel tariffs currently being finalized and a second response also in the works.

“We are now preparing for further countermeasures, to protect our interests and our businesses if negotiations fail,” she said, adding that the EU will be watching for indirect effects the reciprocal tariffs could have. “We cannot absorb global overcapacity nor will we accept dumping on our market.”

The EU last month planned to impose tariffs on a broad range of American products including whiskey, poultry and motorcycles to counter Trump’s metals charges, aiming for a first batch to take effect at the start of this month.

The first wave of tariffs on US goods is now set to go into effect on April 15, with tariffs on a second set of goods slated to take effect in mid-May, a senior official at the commission said. The new timeline allows more time for negotiations with the U.S. and to respect World Trade Organization rules, the same official said.

Von der Leyen said it isn’t too late to engage in talks with the US. “From the outset we have always been ready to negotiate with the United States, to remove the remaining barriers to transatlantic trade,” she said.

US tariffs on steel and aluminum imports went into effect last month, hitting the EU’s already embattled industrial base. Additional 25 per cent tariffs on global automotive imports also go into effect Thursday.

“The cost of doing business with the United States will drastically increase,” von der Leyen said.

The US president has used tariffs to deal with what he sees as imbalances between the US and other global economies on trade. Trump also ordered federal agencies to look into a broad range of corporate regulations in non-US countries out of suspicion they unfairly target American companies, with a view to factoring them into trade policy. A recent US trade report dedicated several pages to EU laws such as the Digital Markets Act, saying they are discriminatory.