Trade War Deepens: EU Weighs 25% Retaliatory Tariffs, Trump Threatens China With 50% Tax
by Sara Dorn · ForbesTopline
The European Union is considering a 25% tariff on a range of U.S. goods, according to multiple reports Monday, while President Donald Trump threatened to impose an additional 50% tax on imported Chinese goods—the latest countermeasures by the U.S. and its trading partners amid the fallout from Trump’s sweeping tariffs.
Key Facts
The European Commission is weighing a new 25% tax on goods including diamonds, dental floss and some food products, in response to a 25% global tariff on steel and aluminum Trump announced in February, multiple outlets reported, citing a document outlining the proposal.
Meanwhile, Trump said Monday a new 50% tariff on Chinese products could start Wednesday, the same day his sweeping tariffs on all U.S. trading partners announced last week are set to take effect.
The White House assigned one of the steepest levies—34%—to China, on top of a 20% tariff imposed earlier this year, meaning the tax would climb to 104% if Trump follows through with his latest threat.
China announced the 34% tariff on imported U.S. products, starting Thursday, in retaliation for the new tariffs Trump announced last week.
Meanwhile, the White House has said it’s in talks with dozens of other countries after last week’s announcement—Israeli Prime Minister Benjamin Netanyahu is set to visit the White House on Monday in hopes of making a deal with Trump, and the European Union Commission said it offered Trump a “zero-for-zero” tariff deal on industrial goods.
What To Watch For
EU member states are set to vote Wednesday on the retaliatory tariffs for Trump’s metals tax. The proposal suggests some of the taxes would take effect May 16 and the rest on Dec. 1. European Union trade commissioner Maros Sefcovic said earlier Monday the commission narrowed the scope of goods it initially planned to target—worth an estimated $28.5 billion—after “listening very carefully to our member states.”
Key Background
Trump last week announced new “reciprocal” tariffs on more than 180 countries on what he coined “Liberation Day,” with many of the rates far exceeding expectations, including a 10% baseline rate for all countries, a 20% tax on the European Union, 24% for Japan and 26% for India. Trump has remained defiant even as global stocks continued to tank Monday in the wake of the announcement, accelerating recession fears and warnings that inflation will worsen under the tariffs. Trump dismissed those concerns Monday on Truth Social, writing “Don’t be Weak! Don’t be Stupid!” while urging patience and falsely claiming “there is NO INFLATION.” He has repeatedly likened the tariffs to treatment of a sick patient—the U.S. economy, according to his analogy—telling reporters Sunday aboard Air Force One “sometimes you have to take medicine to fix something.”
Tangent
All three U.S. stock indices briefly rebounded Monday in the wake of an unsubstantiated rumor that Trump was considering a 90-day pause to the tariffs, only to drop again less than an hour later when the White House said the report was false.
Further Reading
Will Trump Negotiate Tariffs? Japan And Israel Head To U.S. To Negotiate As Countries Make Offers (Forbes)
Billionaires Including Elon Musk Speak Out Over Global Market Meltdown And Trump Tariffs (Forbes)