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Customs Talks: Tariffs have dominated the news recently, with threats of tariffs and other measures, retaliations and last-minute ‘deals’ to postpone immediate implementation of what effectively amounts to trade restrictions. The effects of these developments ripple through global trade.
Our experts discuss the latest state of affairs: US tariffs, the European response and the consequences for businesses in the Netherlands.
An assertive trade policy with uncertain consequences
In early 2025, US President Donald Trump announced a series of measures intended to address concerns regarding illegal immigration, drug trafficking, and economic security. This decision prompted an immediate and intense international reaction, with major trading partners responding with tariffs, formal complaints to the World Trade Organization, and heightened diplomatic negotiations. As markets adjust and businesses reevaluate their supply chains, the long-term consequences of this assertive trade policy remain uncertain.
Overview of tariff developments
Tariffs are being announced, adjusted, suspended and reinstated in swift succession. A short overview of the developments in the last several weeks:
February 1st, 2025:
President Trump announces tariffs on imports from Mexico (25%), Canada (25%), and China (10%).February 3rd, 2025:
Following protracted negotiations, a consensus is reached on the implementation of a 30-day suspension of tariffs for Mexico and Canada, with both countries committing to improving their anti-drug trafficking measures.February 4th, 2025:
The implementation of tariffs amounting to 10% on all Chinese imports is confirmed to proceed as scheduled.February 10/11th, 2025:
Plans are announced to impose a 25% tariff on all steel and aluminum imports. The tariff is expected to have the greatest impact on trading partners such as Argentina, Australia, Brazil, Canada, EU countries, Japan, Mexico, South Korea and the United Kingdom.February 18th, 2025:
The US government announces its intention to impose a 25% tariff on automobile imports with effect from 2 April 2025. The implementation of tariffs of 25% or higher on pharmaceuticals and semiconductors is also being considered. The imposition of tariffs by the US has had a significant impact on the European automotive industry, given the United States' status as an important export market. The potential reduction in operating profits is expected to be billions of euros.February 27th, 2025:
Confirmation of the reintroduction of tariffs to the value of 25% for imports from both Canada and Mexico, as well as an additional 10% tariff on Chinese goods, with effect from 4 March 2025.March 1st, 2025:
President Trump signs an executive order with the objective of increasing U.S. lumber production and investigates the potential implementation of tariffs on imported lumber.March 4th, 2025:
The 30-day deferral period concludes, and the 25% tariffs imposed on trade with Canada and Mexico are implemented. The tariffs on Chinese imports are increased from 10% to 20%.March 12th, 2025:
The implementation of tariffs amounting to 25% on steel and aluminum is officially initiated.March 13th, 2025:
President Trump warns the European Union, and threatens to impose 200% tariffs on wine, champagne, and other alcoholic beverages if the EU does not withdraw its tariffs on whiskey. This move follows the EU’s response to US tariffs on steel and aluminum, in which the EU announced its own tariffs on US products, amounting to 26 billion euros.March 26th, 2025:
A 25% tariff is announced on cars and car parts for imports into the US. The tariff enters into force on 2 April 2025 with charges for imports of cars as of the following days. For car parts, charges are set to start in May.
Please bear in mind that these developments are unfolding at a rapid pace. Your Baker Tilly advisor would be happy to bring you up to speed. For a more elaborate overview of the developments and the underlying reasoning, please read this article by our Baker Tilly International network partners in Germany.
The impact on the European Union
The imposition of tariffs by the US has exerted a substantial burden on European industry. It has led to increased costs for exports to the US and a weakening of the competitiveness of European manufacturers. Companies may be compelled to either transfer the additional costs to their customers through price increases or to reduce their profit margins, with the result that economic losses will be incurred. The tariffs have the potential to result in a decline in production, job losses, and the implementation of countermeasures by the EU, further exacerbating the transatlantic trade conflict.
The European Union’s response to the imposition of US tariffs
The European Union has adopted a robust response to the tariffs of up to 25% imposed by the USA on steel, aluminum, and other products. The EU Commission has declared its intention to implement a combination of existing and novel countermeasures to safeguard European companies and consumers from the economic ramifications.
Phase one: Re-introduction of existing tariffs
The European Union (EU) is countering the tariffs recently imposed by the US on steel and aluminum imports by reintroducing its own countermeasures. These tariffs, which were originally introduced in 2018 and 2020 in response to US trade restrictions but later suspended, will now come back into force as of 1 April 2025. The reintroduced tariffs will encompass a broad spectrum of US products, including bourbon whiskey, motorbikes, jeans, orange juice, peanut butter, and boats. Additionally, products such as steel products, industrial goods, and special steel and aluminum products will be subject to the tariffs.
Phase two: New punitive tariffs
New tariffs are being considered, and the EU will introduce tariffs on a wide range of US industrial and agricultural products, including fruit, cereals and other agricultural products. A list of products that are to be affected by the additional countermeasures has been published. The objective of these measures is to ensure that the economic harm caused by the tariffs imposed by the US is offset to the same extent by EU countermeasures.
The EU Commission will now undertake a comprehensive evaluation of the feedback received in various stages of the process and will soon finalise the draft implementing act. The implementation of the countermeasures – which are currently being evaluated and finalised – is scheduled for mid-April, at which point the implementing act will enter into force and the countermeasures will officially take effect.
More information on dealing with tariffs
These rapid developments make it difficult to predict exactly how punitive tariffs may affect EU businesses. However, it is clear that the playing field has changed altogether. We recommend that companies keep a close eye on these developments.
For more information about the general impact of punitive tariffs on your business, please read this article by our Baker Tilly International network partners in Germany (Baker Tilly Holding GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft).
If you would like to discuss the possible consequences and opportunities for your business, our advisors would be happy to assist you. Please feel free to contact our VAT & Customs Advisory experts Stevie Mols or Marisa Hut.
The legislation and regulations in this area may be subject to change. We recommend that you discuss the potential impact of this with your Baker Tilly advisor.
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