EU retaliatory tariffs on American products: what it means for businesses

In this blog, we explain the EU's proposal, the key dates, and how the targeted goods will be identified.

The new US tariffs

The US introduced tariffs on EU products that came into force on 12 March 2025. These reinstated 2018 tariffs on steel and aluminium products, increasing the 2018 tariffs on aluminium from 10% to 25%. The tariffs also extended to additional steel and aluminium products, including those only partly comprised of either metal.

The European Commission estimates the US tariffs will affect €26 billion of EU exports – around 5% of total EU goods exports to the US.

The EU's response

During President Trump's first term, the US imposed tariffs, prompting retaliatory tariffs from the EU in 2018 and 2020. The retaliatory tariffs were suspended until 31 March 2025 following discussions between the Commission and then-President Biden in 2021 (now announced to take effect from mid-April 2025).

In response to President Trump's latest tariffs, the Commission will likely reimpose the 2018 and 2020 tariffs alongside targeting a further €18 billion in American goods. The EC is consulting on the proposed list of target products. While the 2018 and 2020 measures targeted around 300 product types, the 2025 proposals include over 1,700 types of goods.

Identifying American origin

The EU uses its non-preferential rules of origin to determine the origin of imported American goods. As a rule of thumb, goods 'wholly obtained' or 'substantially transformed' last in the US are considered to be of American origin.  

Given the extensive additional tariffs, American exporters may be considering relocating their production to third countries that are not subject to EU tariffs. The EU Court of Justice's recent ruling in the Harley Davidson case allows the Commission to effectively ignore such a shift in production if the dominant purpose is to avoid the EU's retaliatory tariffs.

Following the EU's retaliatory tariffs in President Trump's first term, Harley Davidson moved some production to Thailand and obtained Binding Origin Information (BOI) decisions from Belgium confirming their view that the bikes originated in Thailand. However, the Commission subsequently revoked the BOI decisions, relying on contemporaneous regulatory filings from Harley Davidson as evidence that the relocation was with the purpose of avoiding the retaliatory EU tariffs. The Commission's decision was upheld in the General Court and on appeal to the Court of Justice.

The impact of this decision is that, where an intention to avoid the retaliatory tariffs is apparent, the Commission can determine origin by applying the rules in Article 33 of the Union Customs Code (UCC) Delegated Act, and ignore processing in the third country as being 'not economically justified'.

In such cases, origin is generally determined to be the country where the 'major portion' of the materials originated (by weight or value depending on the goods). However, special residual rules apply to some products (see our Appendix below for a list of such goods).

Timeline to retaliatory tariffs

The US' new tariffs on EU products came into effect on 12 March 2025. Exporters and importers of American goods into the EU should be aware of two key dates:

1. 26 March – The EC's consultation on additional products subject to tariffs ends.
2. Mid-April – Additional tariffs come into effect.

While the final scope of the tariffs is yet to be finalised, it is clear that the Commission will be significantly expanding its tariffs on American products absent any urgent interventions.

US exporters will need to consider carefully how the EU's tariff rules apply in light of Harley Davidson, with special rules governing attribution of origin if the production in third countries is found to be not "economically justified".

Fieldfisher's International Trade and Sanctions team advises global clients in a range of sectors on sanctions regimes in the EU and UK. If you would like to discuss any of the issues covered in this blog, please contact Andrew Hood or Vansh Gupta. 

The content of this blog does not constitute legal advice and is provided for general information purposes only. Specific legal advice should be sought before taking any actions based on the content of this blog.

Our thanks to trainee solicitor Jonathan Comfort who assisted with the preparation of this blog.
 
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Appendix
Goods with special rules for identifying country of origin

(Drawn from Annex 22-01 to the UCC Delegated Act)

• Meat and edible offal (Chapter 2);
• Dairy produce; birds’ eggs; natural honey; edible products of animal origin, not elsewhere specified or included (Chapter 4);
• Coffee, tea, maté and spices (Chapter 9);
• Products of the milling industry; malt; starches; inulin; wheat gluten (Chapter 11);
• Vegetable plaiting materials; vegetable products not elsewhere specified or included (Chapter 14);
• Sugars and sugar confectionery (Chapter 17);
• Preparations of vegetables, fruit, nuts or other parts of plants (Chapter 20);
• Beverages, spirits and vinegar (Chapter 22);
• Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, ‘dental waxes’ and dental preparations with a basis of plaster (Chapter 34);
• Albuminoidal substances; modified starches; glues; enzymes (Chapter 35);
• Articles of leather; saddlery and harness; travel goods, handbags and similar containers; Articles of animal gut (other than silk-worm gut) (Chapter 42);
• Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans (Chapter 49);
• Silk (Chapter 50);
• Wool, fine or coarse animal hair; horsehair yarn and woven fabric (Chapter 51);
• Cotton (Chapter 52);
• Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn (Chapter 53);
• Man-made filaments; strip and the like of man-made textile materials (Chapter 54);
• Man-made staple fibres (Chapter 55);
• Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof (Chapter 56);
• Carpets and other textile floor coverings (Chapter 57);
• Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery (Chapter 58);
• Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use (Chapter 59);
• Knitted or crocheted fabrics (Chapter 60);
• Articles of apparel and clothing accessories, knitted or crocheted (Chapter 61);
• Articles of apparel and clothing accessories, not knitted or crocheted (Chapter 62);
• Other made up textile articles; sets; worn clothing and worn textile articles; rags (Chapter 63);
• Footwear, gaiters and the like; parts of such articles (Chapter 64);
• Ceramic products (Chapter 69);
• Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin (Chapter 71);
• Iron and steel (Chapter 72);
• Articles of iron or steel (Chapter 73);
• Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal (Chapter 82);
• Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof (Chapter 84);
• Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles (Chapter 85);
• Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof (Chapter 90);
• Clocks and watches and parts thereof (Chapter 91); and
• Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings (Chapter 94).