Trump threatens EU with retaliatory tariffs during talk with Irish PM
President Donald Trump said he’ll hit the European Union with new retaliatory tariffs during his meeting with Ireland’s prime minister Micheál Martin.
- But Trump’s back and forth, particularly on auto and other tariffs, are causing uncertainty among CEOs and manufacturers.
For months on the campaign trail, President Donald Trump promised to enact sweeping tariffs that he said would restore the American economy to its former height.
Two months into office, Trump has followed through on that promise, launching a trade war with Canada and threatening to raise tariffs on goods from other countries, including Mexico, China and the European Union, should they not stop the flow of drugs and illegal immigration into the United States.
However, Trump has repeatedly pushed back the dates these fees go into effect, and he has shifted his plans nearly daily, leading the stock market to wobble.
Here’s a snapshot into what we know about how the tariffs would impact Indiana’s economy.
Steel
As the top steel producing state in the country, Indiana has perhaps the most to gain with tougher tariffs on metals.
Steel industry leaders expressed strong support for Trump’s implementation of 25% tariffs on all steel imports from Canada, which they say closes a loophole that allowed importers to skirt tariffs by buying fabricated steel abroad.
Leaders from five organizations representing the American steel industry wrote to Trump that the imposition of the tariffs allowed producers to restart idled mills, rehire laid-off workers and invest tens of billions of dollars in new and upgraded plants.
Still, others in Indiana, particularly those in the construction industry, say the tariffs could lead to higher prices and sap momentum on large development projects. Some U.S. companies saw higher prices on steel due to price gauging before the tariffs took effect Wednesday.
Kevin Hunt, President of Shiel Sexton in Indianapolis, said his suppliers predict future prices that will raise construction costs significantly. The additional costs could potentially delay major private developments in the city that have not broken ground, he said.
“It’s not going to stop IU Health from their construction. It’s not going to stop Lilly from what they’re building, or Purdue or IU who need a state project, because they’re well-funded,” Hunt said. “Those projects are pretty far along and they’re not going to stop construction at this point. Where it can have a dramatic effect is on some of the private developers and some of those projects, the ones that are not yet starting construction.”
Cars
While tariffs could hit foreign carmakers hard, even domestic car manufacturers are under pressure as most car models and parts pass over the border multiple times before heading to the car lot. The Big Three U.S. automakers — General Motors, Ford and Stellantis — have been engaged in talks with Trump to drop or loosen the tariffs. The three convinced Trump of a one-month reprieve as automakers study production lines.
Experts have warned tariffs on the auto industry could raise prices dramatically for consumers, but manufacturers could decide to cover the extra costs, at least for a bit. On Thursday, BMW announced it would eat the cost of the tariffs, which will put pressure on other automotive companies to do the same, said Ryan Rohrman, CEO of Rohrman Automotive Group.
“I do think that is probably going to be the case for many, many manufacturers. You’ll start to see that happen because they all have the ability to do that, so if a manufacturer actually says, ‘We’re just going to pass it by increasing the price,’ they’re going to become so uncompetitive that they won’t sell cars,” Rohrman said.
Many car manufacturers have put new technology on hold as they wait to see what tariffs will be put into place. Auto production lines are planned years in advance and cost billions of dollars, meaning the industry cannot flip plans on a dime, several automaker CEOs have told Trump.
Honda is reportedly moving production of its new Civic Hybrid to Indiana to skirt tariffs. Honda has not confirmed or denied the report. But expensive and logistically challenging moves can also delay new generations of car models. The Civic Hybrid has already been delayed six months, while the Ford F-150 is a year delayed. This in turn can lead to smaller supplies of cars for sale and higher prices.
Meanwhile, the United Auto Workers union supports Trump’s tariffs, calling them a “powerful tool in the toolbox for undoing the injustice of anti-worker trade deals” in a statement posted online. The union did not support Trump in the 2024 election.
“It is stimulating some positives for the American auto workers, which I do think that’s great for our economy, but at the same time, you can’t shift in 60 days and have a real positive effect for everyone,” Rohrman said.
Bikes
Similar to automobiles, bikes contain more than 100 parts sourced from all over the world, meaning tariffs could increase the prices of bikes substantially. But those price increases could take a while to hit consumers.
Scott Helvie, owner of Bicycle Garage Indy, said he hasn’t seen increased prices yet, but there are “very few” bikes that are made in the United States. And there’s little Helvie can do as prices are set by the manufacturer, which are ultimately passed down to bike shops and their consumers.
“We’re hoping to let the dust settle,” Helvie said as his store prepared for its spring sale. “It will likely have an impact sometime this year in terms of increased prices, but it’s a little too early for us to tell.”
Alcohol
On Thursday, Trump threatened a 200% tariff on alcoholic products imported from countries in the European Union. The move was in response to a tax the EU placed on American whiskey.
It’s unclear when the tariff would go into effect, but the Distilled Spirits Council quickly urged Trump to negotiate “zero-for-zero tariffs” between the United States and Europe, the standard for such trade since 1997.
What Indiana politicians have said about tariffs
Politicians on both side of the aisle have taken to X to express reservations about tariffs. Senator Todd Young said he hopes the tariffs don’t evolve to a long-term measure that could hurt Indiana’s agriculture economy.
Rep. Andre Carson pushed back on tariffs Wednesday, calling the trade war with Canada “a reckless fight.”
Former Vice President Mike Pence, who clashed with Trump during his first term on the President’s tariff policies, called on the federal government to pursue free trade to lower costs for Americans.
Actually @SecScottBessent, it is. Tariffs are good as a means to bring nations like China to the table, but free trade lowers the costs of goods and improves the quality of life for every American. Let’s Pursue Free Trade with Free Nations and Revive the American Dream.
… pic.twitter.com/XmmPZvWHBr
— Mike Pence (@Mike_Pence) March 7, 2025
IndyStar reporter Brittany Carloni contributed to this report.
Alysa Guffey covers business and development for IndyStar. Have a story or tip? Contact her at amguffey@gannett.com.
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