EU Announces Countermeasures Following Imposition of US Tariffs

On 12 March 2025, the United States (US) imposed tariffs of up to 25% on imports of steel, aluminium, and certain products containing steel and aluminium from the European Union (EU) and other trading partners.

In response, the EU announced a two-step approach on 12 March 2025:

• First, the European Commission (Commission) will allow the suspension of existing 2018 and 2020 countermeasures against the US to lapse on 1 April. These countermeasures target a range of US products in response to the economic harm done to €8 billion of EU steel and aluminium exports.
• Second, in response to new US tariffs affecting more than €18 billion of EU exports, the Commission is implementing a package of new countermeasures on US exports. They will come into force by mid-April, following consultation of EU Member States and stakeholders.

The EU has announced that the countermeasures could apply to US goods exports worth up to €26 billion, matching the economic scope of the US tariffs.

1. Non-renewal of the suspension of the 2018 / 2020 countermeasures

In June 2018, US President Donald Trump introduced tariffs on €6.4 billion (€8 billion based on 2024 flows and values) of European steel and aluminium exports. In January 2020, additional tariffs followed, affecting around €40 million of EU exports of certain derivative steel and aluminium products.

In response:

• In June 2018, the EU introduced its countermeasures on €2.8 billion of US exports to the EU. These countermeasures were structured into two sets of measures (Annexes I and II), each affecting different product categories. Annex I targeted €2.8 billion worth of US goods, while Annex II was to target €3.6 billion worth of goods. while Annex I came into effect immediately in June 2018, Annex II was scheduled to enter into force in June 2021. Before the scheduled implementation of Annex II, the EU suspended all measures (i.e. both Annexes) until 31 March 2025.

  For most of Annex I products—including, for example, tobacco products, some textile products, and many iron or steel products—additional ad valorem duties of 25% are set forth.

  The rate of additional duties is more varied for Annex II products and can go up to 50% on products such as, for example, for some furniture or other textile products.

  The products concerned can be found in the Annexes to Regulation (EU) 2018/886. 

• A similar EU response followed the second set of US tariffs in 2020 in Commission Implementing Regulation (EU) 2020/502. These additional rebalancing measures, affecting exports valued up to €3.6 billion, were scheduled to enter into force on 1 June 2021. These measures provided for an additional duty of 20% for lighters, 7% for fittings for furniture, and 4.4% for playing cards.

  Following discussions with the US on tariff-based quota system for EU exporters, the EU, in Commission Implementing Regulation (EU) 2023/2882 of 18 December, suspended these measures until 31 March 2025 in order to give space for the parties to work out a longer-term solution.

  In light of the US measures that entered into force on 12 March 2025, the suspension of the above mentioned EU countermeasures will lapse on 31 March 2025, and the goods that are customs clearedinto the EU as from 1 April 2025 covered by the above mentioned Regulations will be subject to these additional duties.

2. Additional EU countermeasures contemplated

2.1 The product scope contemplated for the additional countermeasures

Since the new US tariffs are significantly broader in scope and affect a significantly higher value of European trade, on 12 March, the Commission launched the process to impose additional countermeasures on the US. These will target approximately €18 billion worth of goods, which will then apply together with the reimposed measures from 2018. The objective is to ensure that the total value of the EU measures corresponds to the increased value of trade impacted by the new US tariffs.

The list of products contemplated for these countermeasures is extremely long and varied.

The covered products include, but are by no means limited to: fresh or chilled poultry, dairy products, some fruit, prepared meat, sugar, chewing gum, certain beverages, wine, spirits, preparations for animal food, heated tobacco products, beauty and skin care products, shampoos and soap, gloves, certain wood types, certain types of paper, certain types of carpets, a large number of types of apparel items, certain types of footwear, certain types of tubing and pipes, certain electric appliances, and certain bicycles and motorcycles.

2.2 The procedure for the adoption of the additional countermeasures

The Commission has announced the following steps that should lead to the adoption of the countermeasures:

(i) 12 March 2025: Stakeholder consultations regarding the countermeasures planned by the Commission.

Stakeholders can make their views known by entering their views into the "Information gathering" under Article 9 of Regulation (EU) No 654/2014 regarding US measures on steel and aluminium.

The deadline to do so is by 26 March 2025, 12:00 (UTC+01:00), Brussels time.

(ii) 26 March and subsequent days:

Stakeholder consultation concludes.

The Commission consolidates and assesses the stakeholder inputs.

The Commission finalizes its implementing draft, setting forth the contemplated countermeasures and their product scope, and consults the Member States on it.

The legal basis for this act will be the Enforcement Regulation because the EU considers the US measures to be safeguards. (View the current consolidated version of the Enforcement Regulation).

Article 1 of Regulation (EU) No 654/2014 provides the following:

"This Regulation lays down rules and procedures to ensure an effective and timely exercise of the Union's rights to suspend or withdraw concessions or other obligations under international trade agreements, with the intention of:

(a) responding to breaches by third countries of international trade rules which affect the Union's interests, with a view to seeking a satisfactory solution that restores benefits for the Union's economic operators;

(b) rebalancing concessions or other obligations in the trade relations with third countries, when the treatment accorded to goods or services from the Union is altered in a way that affects the Union’s interests."

Hence, the EU countermeasures are considered to be rebalancing concessions. And Article 3(c) provides that the Enforcement Regulation applies,

"for the rebalancing of concessions or other obligations, to which the application of a safeguard measure by a third country may give right pursuant to Article 8 of the WTO Agreement on Safeguards, or to the provisions on safeguards included in other international trade agreements, including regional or bilateral agreements;"

Hence, the reference by the EU to the US measures constituting safeguard measures.

The type and level of the countermeasures have not yet been announced and are under investigation. The Commission is considering the following commercial policy measures, as envisaged in Article 5 of the Enforcement Regulation: (1) the suspension of tariff concessions under Article 8 of the WTO Agreement on Safeguards; and (2) imposition of increased customs duties on certain products from the United States. 

The process up to the adoption of the countermeasures will follow the comitology procedure, whereby EU Member States will be invited to endorse the proposed measures before they are adopted.

The reference to comitology is to the examination procedure of Article 5 of Regulation (EU) No 182/2011. This means that the EU Member States will be requested to vote on the countermeasures proposed by the European Commission and the vote will be taken based on a qualified majority.

(iii) Mid-April: The adoption process concludes, and the act imposing the countermeasures enters into force.

3. Impact on businesses

Aside from the immediate financial impact on businesses importing products that will be subject to the additional duties, the EU's proposed measures require EU importers to act with caution when continuing to import the same type of product from a US based producer that has relocated its production to a third country.

In light of the Court of Justice of the EU's judgment in Harley-Davidson in November 2024, the transfer of production form the US to another country may give rise to circumvention concerns. The judgment involved an appeal focusing on binding origin information (BOI) for Harley-Davidson motorcycles under EU customs rules.

The judgment clarified the application of Article 33(1) of the Union Customs Code Delegated Act (UCC DA), and ruled that—if the primary or dominant purpose of relocating production is to avoid customs duties or trade measures—such relocation is not economically justified. In such cases, the origin is determined by the "major portion rule" under Article 33(3) UCC DA, based on the origin of the major portion of parts, rather than the country of last substantial transformation.

Notably, the customs duties or trade measures that Harley-Davidson was alleged to have circumvented were the ones imposed under the aforementioned Commission Implementing Regulation (EU) 2018/886, which imposed the initial countermeasures on US exports in 2018.

The Harley-Davidson judgment therefore adds a layer of complexity to production strategies. Companies considering relocating production to avoid tariffs must ensure such moves are for economically justified reasons, not primarily to circumvent trade measures. For example, if a US company moves production to a third country to avoid tariffs but most parts still originate from the US, the EU may apply the "major portion rule," classifying the product as being of US origin and subjecting it to tariffs. This is particularly relevant given the judgment's emphasis on assessing intent at the time of decision, requiring companies to provide evidence of economic justification.

In conclusion, companies must stay informed about the specific products targeted by the EU's retaliatory measures, understand the origin determination rules under the Harley Davidson judgment, and ensure production relocations are for valid economic reasons.

Mayer Brown's International Trade practice has significant experience in the fields of trade and customs legislation, and is well-placed to assist companies with navigating the increasing complexities of the global trade landscape.