GOTHENBURG, Sweden — The European Union is making good on its threats to retaliate against the Trump administration’s tariffs, moving to slap penalties on $3.2 billion of U.S. products made by the president’s political base, like bourbon, motorcycles and orange juice.
The European counterattack, a response to the administration’s measures on steel and aluminum imports, was expected to go into effect at midnight Thursday Brussels time and add another front to a trade war that has engulfed allies and adversaries around the world. China and Mexico have already struck back with their own tariffs, and Canada, Japan and Turkey are readying similar offensives.
The risk of escalation is high because President Donald Trump has promised even more tariffs. Taking aim at German car manufacturers, the president has started an investigation into automobile imports to determine whether they pose a national security concern, the same justification as he used for the metal tariffs.
“You look at the European Union,” Trump told a crowd in Duluth, Minnesota, on Thursday. “They put up barriers so that we can’t sell our farm products in. And yet they sell Mercedes and BMW and the cars come in by the millions. And we hardly tax them at all.”
The United States is fighting from a position of strength, with the U.S. economy on track for one of its strongest years in a decade. Europe doesn’t have the same defenses. Growth in the region is slowing, and that weakness has been compounded by political turmoil in Italy and Germany, as well as Britain’s decision to leave the European Union.
But in a trade war no sides are left unscathed. Although Trump has sought to exert pressure on other countries, the global nature of supply chains means the tit-for-tat tariffs are ricocheting in unexpected ways and may ultimately cost jobs in the United States.
Sales of Mercedes SUVs, made in Alabama by the German automaker Daimler, will most likely be hit by the U.S. trade dispute with China. The Swedish manufacturer Volvo faces rising prices on the imported steel it uses at its Mack Truck factory outside Allentown, Pennsylvania.
The path to reconciliation is shrouded in uncertainty, creating the potential for broader strain in the global economy. While the Trump administration has sought to use economic force to exert concessions, the successive drumbeat of attacks has left little time to negotiate. Formal trade talks between Brussels and Washington have broken down, although informal channels have remained open.
The European Commission, the bloc’s administrative arm, applied its sanctions more than a week earlier than expected, in what analysts said was a show of strength. “It’s a signal that the EU is striking back and taking this seriously,” said Holger Schmieding, chief economist at Berenberg Bank in London.
The new slate of European tariffs focuses on products that tend to be manufactured in Republican strongholds: whiskey and playing cards from Kentucky, recreational boats from Florida and rice from Arkansas.
Shares of major German and U.S. carmakers fell sharply Thursday on worries of a trade-related slowdown. Daimler shares closed down more than 4 percent in Frankfurt, Germany, trading and BMW shares were off 3 percent.
If the trade conflict continues, companies could consider relocating assembly lines to other countries, leading to job losses in the United States.