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Donald Trump leaves after a meeting with EU officials at EU headquarters. Photo: THIERRY CHARLIER / AFP / Getty Images

Plans for the Trump administration to hit the European Union with steel and aluminum tariffs could be announced as early as Thursday, reports the Wall Street Journal citing people familiar with the matter.

Why it matters: The EU has threatened retaliatory tariffs on U.S. products such as "motorcycles, jeans and bourbon." The report follows Commerce Secretary Wilbur Ross' criticism that the European Union isn't negotiating on trade thanks to the United States' steel and aluminum tariffs, citing China as a counterexample.

What to expect: If the tariffs go through, you'll see domestic and imported steel and aluminum prices spike because the EU is a top supplier. 

  • The EU will likely retaliate almost immediately. They’ve already filed what they plan to do — their list of retaliatory measures — at the World Trade Organization (WTO.) The EU’s big public threats are tariffs on Harley Davidsons and Kentucky whiskey (targeting Paul Ryan and Mitch McConnell respectively.)

The snowball effect: The U.S. imposing tariffs would likely have knock on effects. Until now, the only country that has directly retaliated against the U.S. on these steel and aluminum tariffs is China. Add in to the mix other countries who have made threats but haven’t retaliated — yet.

  • If the EU were to retaliate, that move would effectively give a green light for other WTO members to retaliate. Nobody wants to be considered a bad actor — but if the EU does it, they’re considered a good global actor, so others are more likely to follow.

The big questions: What does the U.S. do to fight back? Does the trade war blow out beyond steel and aluminum? Every time the countries keep poking each other, there’s an increased threat of escalation, which would potentially spark a much wider conflict.

Be smart: We already have the specter of automobiles, with Trump’s threat to put a 25% tariff on autos. So far, WTO members have been restrained with respect to Trump’s steel and aluminum tariffs. This could easily change if the EU goes on the offensive. 

The other player: What happens with NAFTA negotiations? Trump has exempted Canada and Mexico from steel and aluminum tariffs to incorporate the NAFTA dealing. The deadline for the exemption comes up June 1. Trade experts watching this assume Trump will grant Canada and Mexico an extension to their exemptions, but nothing is certain.

Go deeper

Tech scrambles to derail inauguration threats

Illustration: Sarah Grillo/Axios

Tech companies are sharing more information with law enforcement in a frantic effort to prevent violence around the inauguration, after the government was caught flat-footed by the Capitol siege.

Between the lines: Tech knows it will be held accountable for any further violence that turns out to have been planned online if it doesn't act to stop it.

Dave Lawler, author of World
5 hours ago - World

Uganda's election: Museveni declared winner, Wine claims fraud

Wine rejected the official results of the election. Photo: Sumy Sadruni/AFP via Getty

Yoweri Museveni was declared the winner of a sixth presidential term on Saturday, with official results giving him 59% to 35% for Bobi Wine, the singer-turned-opposition leader.

Why it matters: This announcement was predictable, as the election was neither free nor fair and Museveni had no intention of surrendering power after 35 years. But Wine — who posed a strong challenged to Museveni, particularly in urban areas, and was beaten and arrested during the campaign — has said he will present evidence of fraud. The big question is whether he will mobilize mass resistance in the streets.

Off the Rails

Episode 1: A premeditated lie lit the fire

Photo illustration: Sarah Grillo/Axios. Photo: Chip Somodevilla/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 1: Trump’s refusal to believe the election results was premeditated. He had heard about the “red mirage” — the likelihood that early vote counts would tip more Republican than the final tallies — and he decided to exploit it.

"Jared, you call the Murdochs! Jason, you call Sammon and Hemmer!”