Executive summary

On 12 March 2925, the European Commission announced countermeasures in response to steel and aluminum tariffs now being imposed by the United States (US).

Since 12 March 2025, the US has been applying Section 232 tariffs of 25% on imports of steel, aluminum and certain products containing steel and aluminum. These measures apply erga omnes (i.e., against all trade partners) and do not specifically target products originating from certain countries. (For additional information, see EY Global Tax Alert, European Union and Canada counter US steel and aluminum tariffs with retaliatory measures, dated 13 March 2025.)

Until 11 March, the European Union (EU) had not announced any countermeasures, taking into consideration that various tariffs had already been announced and withdrawn since Donald Trump took office on 20 January 2025. However, the implementation of the 12 March steel and aluminum tariffs have triggered a two-step reaction from the EU.

EU two-step reaction

First, the EU is reinstating the commercial policy measures that were adopted in 2018, during Donald Trump's first administration, and had been suspended since 2022. These measures will take effect again as of 1 April 2025 and will target imports of certain products originating from the United States. The targeted products include bourbon, certain textile products, specific steel and aluminum products, motorbikes and boats. It is important to note that Annex II to the EU's 2018 countermeasures will also become applicable for the first time — the annex had not been implemented prior to the 2022 suspension.

The 2022 suspension of these measures would have automatically ended on 31 March 2025, necessitating the EU to determine how to proceed with these tariffs.

Second, the EU has published a nearly 100-page document listing tariff codes that could be subject to new additional tariffs. The value of the targeted imports totals approximately €18b, encompassing a wide variety of both industrial and agricultural products.

This list will now serve as the basis for a consultation process running until 26 March 2025. Based on the input received from stakeholders, the European Commission will prepare an implementing regulation to be adopted following a consultation process with the various EU Member States. The European Commission anticipates that the new measures will ultimately enter into force in mid-April.

What should businesses do?

First and foremost, it will be crucial for businesses to assess the potential impact of the two-step reaction proposed by the European Commission. Companies must evaluate the extent to which they have recently imported or expect to import products covered by commodity codes for which additional measures are being reimposed or could be imposed.

It is critical for businesses to ensure that classifications for products to be imported are accurate. Companies must also review customs guarantees and payment balances for sufficiency.

Based on the outcome of the impact assessment, businesses should consider whether they want to submit input to the European Commission in the context of the stakeholder consultation process.

Given the expected impact, companies should investigate potential mitigation strategies. In general, analyzing the elements included in the customs value, utilizing special customs procedures and reviewing sourcing strategies may help to decrease, defer or eliminate the impact of the commercial policy measures. In doing so, it is essential to take an end-to-end perspective on the supply chain and to approach this from a multidisciplinary standpoint involving trade, supply chain and direct tax functions.