Ursula von der Leyen is risking the wrath of three EU counties with a proposed €22billion (£18.4bn) retaliation package in response to US tariffs on European steel and aluminum, it has emerged. The move has sparked backlash from Italy, France, and Ireland, with leaders warning that the new tariffs will disproportionately harm their economies.
The European Commission’s decision to impose tariffs on US products, including a 200% duty on US alcohol, notably bourbon whiskey, has intensified tensions among EU member states. In the past week, the Commission – led by President Ms von der Leyen moved forward with plans for retaliatory tariffs, including levies on US alcoholic beverages, in an attempt to challenge US President Donald Trump’s new trade measures. Italy’s Prime Minister Giorgia Meloni strongly criticised the decision, warning that such retaliatory tariffs could lead to a “vicious circle” of escalating trade tensions.
Urging a more careful approach to avoid damaging European businesses, she said: “We must be careful not to push this into a vicious circle of retaliation that will harm our economy and the wider European Union.”
French President Francois Bayrou echoed such concerns, accusing the European Commission of targeting the wrong sectors.
He said: “We should not target sectors that are important to our economy, such as wine and spirits, just to make a point.”
As one of the EU’s largest exporters of wine and champagne, France stands to lose heavily from these new tariffs.
Mr Bayrou added: “We need to find a way to stand united without harming the sectors that are most vital to our economy.”
Micheal Martin, Ireland’s Prime Minister, also voiced opposition to the strategy, highlighting the risk to Ireland’s agricultural exports, particularly in light of tariffs that would heavily impact the country’s economy.
He said: “We need to focus on solutions that won’t hurt the Irish economy.”
Mr Martin also emphasised that the escalating trade tensions could damage Ireland’s agricultural sector, which relies heavily on strong US trade relations.
He added: “Further escalation could cause irreparable harm to our key sectors, and we must avoid that at all costs.”.
Ms von der Leyen has defended the proposed measures, arguing that they are necessary to protect European industries from unfair competition.
She said: “We must ensure a level playing field and protect our businesses from unfair US tariffs.”
She nevertheless acknowledged the challenges of balancing the interests of all member states while stressing that the EU must remain united, concluding: “We cannot afford to allow the US to undermine our industries without taking action.”
Trade experts, such as Agathe Demarais from the European Council on Foreign Relations, have suggested that the cracks in EU unity were inevitable.
She said: “Not all European countries are exposed in the same way to these tariffs, and some will quickly turn against retaliatory measures when they see the impact on their domestic industries.”
