Collateral Damage: EU Industries Pay the Price in US-China Trade Fight

European industries are becoming the primary collateral damage in a US trade policy originally designed to stop Chinese imports. The ever-expanding list of “derivative” goods subject to US steel tariffs is hitting producers across Europe, including in the UK, creating a crisis for industries far removed from the initial conflict.
The tariffs, which were recently increased to a punitive 50%, were part of an effort to revive the US steel industry and ringfence it from Chinese competition. However, the policy’s scope has since ballooned to include products that simply contain steel, regardless of their connection to the core dispute with China.
This has resulted in 407 categories of goods, from bulldozers to stainless steel sinks, being hit with duties. The broad and seemingly random nature of the list has left many European businesses reeling. As Luisa Santos of BusinessEurope noted, the unpredictable expansion is making the trade relationship with the US “quite turbulent.”
The impact is compounded by draconian enforcement. German MEP Bernd Lange highlighted the absurd situation of a motorcycle maker unable to trace the origin of every single bolt. Some components could have an element of Chinese steel, but proving it is impossible. To avoid massive penalties, the company over-declares and overpays.
This shows how European firms are caught in the crossfire. They are paying a heavy price for a trade war they are not a part of. As the US considers adding even more products to the list, European industry bodies are demanding action to protect themselves from becoming further casualties.