Europe approves first set of tariffs, targeting Republican states

The EU approved measures targeting nearly €21 billion of US products including soybeans, motorcycles and orange juice.

European Commission President Ursula von der Leyen on Wednesday. Picture: AP Photo/Omar Havana

The European Union will apply retaliatory tariffs on nearly €21 billion ($38bn) of United States goods such as soybeans, motorcycles and orange juice after near unanimous approval by the 27 European member countries on Wednesday.

This comes as British Prime Minister Sir Keir Starmer signalled the United Kingdom would now move to a closer trading and economic relationship with Europe as one of Wall Street’s most powerful bosses, Jamie Dimon, warned of a US recession.

Mr Dimon, the chief executive of JP Morgan Chase, said markets were pricing in the uncertainty, and warned a recession was a likely outcome because of poor consumer sentiment.

He told Fox Business: ”When you see a 2000-point decline (on the stockmarket), it sort of feeds on itself, doesn’t it?’’

Mr Dimon said the US government had to make fast progress on trade agreements with other countries.

“Take a deep breath, negotiate some trade deals. That’s the best thing they can do,” he said. “I’m taking a calm view. But I think it could get worse if we don’t make some progress here.”

But Sir Keir warned that the current British trade talks with the United States “would not be enough”, hinting at a recalibration of the global economy and trust issues with the Trump administration.

He said the UK had to be “co-ordinating better across Europe” to protect the economy.

“Because just as we’ve done with defence and security, where we’ve recognised it’s a changing world, we’ve got to step up and act differently,” Sir Keir said.

“In that case with defence spend, co-ordinating better across Europe, so too with trade and the economy.”

A motorcycle parked outside Warr's, Europe's oldest authorised Harley-Davidson dealership in west London on April 4. Picture: AFP

British households are reeling from recent tax rises but the chancellor, Rachel Reeves, is having to look at deeply unpopular further tax hits to balance self imposed budget rules amid fears of a global recession.

British borrowing costs have skyrocketed as yields on 30-year gilts rose to levels last seen 27 years ago and benchmark 10 year yields also increased.

Britain, hit with 10 per cent US tariffs, has resisted any significant retaliatory measures amid the ongoing trade talks with the US.

The European countermeasures announced on Wednesday are in response to Donald Trump’s imposition of 25 per cent tariffs on steel and aluminium made back in February, and they specifically target key Republican states.

The EU has yet to announce further measures in response to the 20 per cent US tariffs across the board but some member states are pushing for retaliatory taxes on tech giants.

The first EU charges will be imposed in three tranches on €21bn ($38bn) of goods from almonds to yachts and will begin on April 15.

“The EU considers US tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy,’’ the European Commission said in a statement.

“The EU has stated its clear preference to find negotiated outcomes with the US which would be balanced and mutually beneficial.’’

The only member state to dissent to the EU tariffs was Hungary.

“Such measures would cause further damage to European economy and citizens by raising prices,” said Hungary’s foreign minister, Péter Szijjártó.

“The only way forward is negotiations, not retaliation,”

The EU move came hours after China announced it was imposing an 84 per cent tariff on US goods, up 50 per cent from the 34 per cent previously announced, as the US imposed 104 per cent levies on Chinese goods.