EU responds to Donald Trump's tariffs with duties on $45b of US goods.

 Extract from ABC News

• Topic:World Politics

10 hours ago

European Commission president Ursula von der Leyen says prices are set to rise in Europe and the US. (Reuters: Photo/Stephanie Lecocq)

In short: 

The European Union is retaliating against US tariffs with "countermeasures" on 26 billion euros of US goods. 

The duties will cover not just steel and aluminium products, but also textiles, home appliances and agricultural goods.

What's next? 

The EU measures are set to go into effect on April 1 and are expected to ramp up prices in both Europe and the United States. 

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The European Union is set to retaliate against US President Donald Trump with "countermeasures" on 26 billion euros ($45 billion) of US goods after his administration increased tariffs on all steel and aluminium imports to 25 per cent.

The series of duties, which are set to go into effect on April 1, are set to ramp up prices in both Europe and the United States, European Commission president Ursula von der Leyen said.

"We deeply regret this measure. Tariffs are taxes. They are bad for business and even worse for consumers. These tariffs are disrupting supply chains. They bring uncertainty for the economy," she said.

"Jobs are at stake. Prices will go up in Europe and in the United States."

Financial commentator Evan Lucas on Donald Trump's tariff decision. (ABC News Breakfast)

The EU measures will cover goods from the United States worth some 26 billion euros, and not just steel and aluminium products, but also textiles, home appliances and agricultural goods.

US residents are expected to feel the pinch on products such as poultry, beef, some seafood, nuts, eggs, sugar and vegetables imported from the EU.

The EU commission manages trade on behalf of 27 member countries, including Germany, Italy, France and the Netherlands.

Britain — which is not part of the EU — meanwhile said it would not impose retaliatory measures of its own on the United States.

The UK government called Washington's decision to impose 25 per cent tariffs on global steel and aluminium imports "disappointing".

What are tariffs and why is Trump placing them on Australian exports?

Photo shows Trump holds up the executive order while his commerce secretary stands behind him with a grin 

The US president often says "tariff" is his favourite word in the dictionary. Australia is about to feel the effects of Donald Trump's love for the protectionist trade tool.

The measures are placing great strain on already tense transatlantic relations between the EU and the US, which represent about 30 per cent of global trade.

Only last month, Washington warned Europe that it would have to take care of its own security in the future.

The United States is the second-biggest export market for EU steel producers, representing 16 per cent of the total EU steel exports.

President of the Eurofer European steel association, Henrik Adam, said the EU could lose up to 3.7 million tonnes of steel exports.

"It will further worsen the situation of the European steel industry, exacerbating an already dire market environment," he said last month.

This is not the first time the EU has imposed countermeasures in retaliation to Mr Trump's tariffs.

In Mr Trump's first term he slapped similar tariffs on EU steel and aluminium.

Ms von der Leyen said: "We will always remain open to negotiation."

ABC/AP