Trump tariffs of 25% on steel and aluminium come into effect globally as Europe says it will retaliate – business live | Trump tariffs

‘I feel utter anger’: From Canada to Europe, a movement to boycott US goods is spreading.

The renowned German classical violinist Christian Tetzlaff was blunt in explaining why he and his quartet have cancelled a summer tour of the US.

“There seems to be a quietness or denial about what’s going on,” Tetzlaff said, describing his horror at the authoritarian polices of Donald Trump and the response of US elites to the country’s growing democratic crisis.

I feel utter anger. I cannot go on with this feeling inside. I cannot just go and play a tour of beautiful concerts.

Tetzlaff is not alone in acting on his disquiet. A growing international move to boycott the US is spreading from Scandinavia to Canada to the UK and beyond as consumers turn against US goods.

Most prominent so far has been the rejection by European car buyers of the Teslas produced by Elon Musk, now a prominent figure in Trump’s administration as the head of the “department of government efficiency” a special group created by Trump that has contributed to the precipitous declines in Tesla’s share price. About 15% of its value was wiped out on Monday alone.

The fall in Tesla sales in Europe has been well documented, as has a Canadian consumer boycott in response to trade tariffs and Trump’s calls for Canada to become America’s 51st state, but the past week has seen daily reports of cultural and other forms of boycotts and disinvestment.

Germany, Ireland and Italy likely to be hit hardest by US tariffs

Lisa O’Carroll

Only three EU countries operate a goods trade surplus with the US – Germany, Ireland and Italy – and are likely to be hit hardest by the US tariffs.

Germany’s trade surplus in goods was €57bn in 2023, according to official US data. In 2023, Germany sold€144bn worth of goods to the US. German made cars accounted for €22bn of that with live medical products including vaccines, blood, antisera and cultures accounting for another €11.4bn.

The US sold €87bn worth of goods to Germany including €8.25bn worth of cars.

Ireland has the second largest trade imbalance, a surplus of €50bn, according to official data for 2023, driven largely by the export of pharmaceuticals to the US from large US multinationals manufacturing in Ireland such as Pfizer. Agricultural products including butter are another big export.

In third place in 2023 was Italy which has a trade surplus was €41bn, selling about €65bn worth of goods to the US. Packaged medicines, cars accounted for about €5bn and €4.66bn of all exports respectively.

US exports to Italy, were worth about €24bn in 2023, dominated by crude oil, hormones and gas, according to official US data.

Here is European Commission president Ursula von der Leyen announcing the EU’s countermeasures this morning.

As of this morning, the United States is applying a 25% tariff on imports of steel and aluminium. We deeply regret this measure.

Tariffs are taxes. They are bad for business and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices up. Nobody needs that on both sides, neither in the European Union nor in the United States.

The European Union must act to protect consumers and business.

She said the counter measures “are strong but proportionate”. As the United States is applying tariffs worth $28bn, the EU is responding with countermeasures worth €26bn. She added:

In the meantime, we will always remain open to negotiations.

The eurozone economy is facing exceptional shocks from trade, defence and climate issues, which could increase inflation volatility and raise the risk that price growth becomes more persistent, according to European Central Bank president Christine Lagarde.

Giving a speech in Frankfurt, she said it is imperative that the bank doubles down on its 2% inflation target and outlines how it reacts to various shocks.

Our expectations have indeed been swept aside in the last few years, and in the last few weeks in particular. We have seen political decisions that would have been unthinkable only a few months ago.

The central bank, which sets interest rates for 20 EU countries that form the eurozone, has cut rates six times in since June but provided no clear hint about future policy last week, leaving markets guessing.

Lagarde said trade fragmentation is likely to lead to larger, more disruptive price changes and could in principle, much like extra defence spending, lead to higher inflation. But there similarly a risk that such shocks counteract each other and extinguish price pressures, she argued.

The key issue for the ECB is that inflation reacts disproportionately more strongly to large shocks than small ones, and such large shocks could make inflation more durable.
These disproportionate price reactions, coupled with the current wage setting mechanism, risk creating persistent inflation problems, she warned.

If such state-dependent pricing becomes standard when the economy is hit by large shocks, but the frequency of wage-setting remains below that of price adjustment, we could see inflation becoming more persistent.

Large shocks would lead to a faster pass-through to inflation, and then wages would have to catch up with prices in a staggered way.

Lagarde did not offer a solution but argued that the ECB must be clear in what it can and cannot do. It means the central bank cannot promise to keep inflation at 2% all times and cannot give specific guidance about where policy is going.

But the bank must set policy so inflation is always converging towards 2% over the medium term and it must outline its “reaction function,” so firms and households will always know how a particular shock will impact policy.

The ECB president said:

We can be clear about our reaction function, and notably how we are likely to be affected by changing circumstances and what kind of data we will look at.

Lisa O’Carroll

European Commission president Ursula von der Leyen has been in touch with the taoiseach Micheál Martin over the weekend ahead of his meeting with Donald Trump today, European Commission officials have confirmed.

However they do not expect the taoiseach or any other leader to engage on trade negotiations as that is an EU competency, rather than a national one.

Lisa O’Carroll

Taoiseach Micheál Martin is meeting Donald Trump at 10am US time for the annual St Patrick’s Day celebrations, a week early this year because of congressional recess, my colleague Lisa O’Carroll reports from Dublin.

The Irish prime minister plans to tell Trump that the trade imbalance raised by secretary of state Marco Rubio in a phone call with the Irish foreign minister last week masks the complexity of the relationship.

He will point out that among Boeing’s biggest customers are Ryanair and Aercap, the world’s largest aircraft leasing company, which could now be impacted by tariffs.

Like last time, in June 2018 when the first Trump administration imposed tariffs on global steel and aluminium imports, today’s 25% tariffs cover plenty of familiar household goods.

Different types of semifinished and finished products, such as steel pipes, wire and tin foil, are included.

The tariffs have been extended to other products, such as stainless steel cooking ware, window frames, doors, and goods only partly made from steel or aluminium, such as machinery, gym equipment and some electrical appliances.

You can read more on the European Commission’s explainer here.

In addition, the US secretary of commerce will establish today a system whereby the US will continue to extend the list of steel and aluminium derivatives products subject to additional duties of up to 25%.

The US tariffs will affect a total of €26bn of EU exports, which corresponds to about 5% of total EU goods exports to the US. Based on current import flows, this will result in US importers having to pay up to €6bn in additional import tariffs.

European stock markets have risen at the open, lifted by hopes of a ceasefire in Ukraine, while the dollar has strengthened against a basket of major currencies.

The FTSE 100 index in London has gained 17 points, or 0.2%, to 8,513, while Germany’s Dax and France’s CAC both advanced by 0.9%, Spain’s Ibex rose by 0.6% and Italy’s FTSE MiB initially climbed by 1% and is now 0.86% ahead.

Ukraine said it was ready to accept an immediate 30-day ceasefire in the war with Russia, as the US announced it would immediately lift its restrictions on military aid and intelligence sharing after high-stakes talks in Saudi Arabia. This seems to have offset worries about the new US steel and aluminium tariffs in stock markets.

The dollar, which has been under a lot of selling pressure in recent days, has risen by 0.3% against rival currencies. Sterling has edged 0.15% lower to $1.2926 while the euro is down by a similar amount, but remains above the $1.09 level – at $1.0903.

In Asia, Japan’s Nikkei was broadly flat (up 0.07%) while Hong Kong’s Hang Seng fell by nearly 1% and Chinese exchanges edged about 0.2% lower. The Australian market lost 1.3%.

Susannah Streeter, head of money and markets at Hargreaves Lansdown:

As the ‘Trump bump’ has turned into a slump, investors are bracing for fresh volatility ahead. The impact of tariffs is front of mind, given broad 25% duties on imports of steel and aluminium have come into effect, with the risk of tit-for-tat retaliation high. China has already responded with higher duties on American goods and the EU is planning counter tariffs, which are expected to come into force in April.

The disquiet evident among investors on Wall Street, spread to Asia, with the Nikkei flat and Chinese indices in the red. London’s FTSE 100 [has seen] a small rebound, buoyed by hopes for a ceasefire in Ukraine. The easing of geopolitical concerns will help improve sentiment to some extent, but investors will still be mulling the impact of tariffs on global growth and prospects for multinationals in an increasingly complex trading world.

UK steel exporters are bracing for harsh winds to blow a storm through the industry, which has already been battered by higher energy costs, weaker demand, and over-supply on world markets.

You can follow the latest on Ukraine here: