The European Union is enforcing tariffs on $3.4 billion in U.S. products as of Friday in retaliation to duties the Trump administration has put on European steel and aluminum.
The goods targeted include typical American products like bourbon, peanut butter, and orange juice, in a way that seems designed to create political pressure on U.S. President Donald Trump and senior U.S. politicians.
Trump imposed tariffs of 25 percent on EU steel and 10 percent on aluminum on June 1. Europeans claim that breaks global trade rules.
The spat is part of a wider tussle over global trade. In two weeks, the United States will start taxing $34 billion in Chinese goods. Beijing has vowed to immediately retaliate with its own tariffs on U.S. soybeans and other farm products in a direct shot at Mr. Trump's supporters in America's heartland.
The tit-for-tat conflict between the United States and China — the world's two largest economies — is poised to escalate from there. The rhetoric is already intensifying.
"We oppose the act of extreme pressure and blackmail by swinging the big stick of trade protectionism," a spokesman for China's Commerce Ministry said Thursday. "The U.S. is abusing the tariff methods and starting trade wars all around the world."
Cecilia Malmstrom, the EU's trade commissioner, acknowledged that the EU had targeted some iconic American imports for tariffs, like Harley-Davidson motorcycles and bourbon, to "make noise" and put pressure on U.S. leaders.
John Murphy, a senior vice president at the U.S. Chamber of Commerce, estimates that $75 billion in U.S. products will be subject to new foreign tariffs by the end of the first week of July.
"We've never seen anything like this," said Mary Lovely, a Syracuse University economist who studies international trade — at least not since countries tried to wall themselves off from foreign competition during the Great Depression.
Those personally in the line of fire are among the most concerned.
"It will be a disaster," said Nagesh Balusu, manager of the Salt Whisky Bar and Dining Room in London and expects the European Union's tariffs to add more than $7 to the price of a bottle of Jack Daniels, which is imported from Tennessee. "It's going to hit customers, that's for sure. How they'll take it, we'll have to wait and see."
As painful as the brewing trade war could prove, many have seen it coming.
Trump ran for the presidency on a vow to topple seven decades of American policy that had favored ever-freer trade among nations. He charged that a succession of poorly negotiated accords — including the North American Free Trade Agreement and the pact that admitted China into the World Trade Organization — put American manufacturers at an unfair disadvantage and destroyed millions of U.S. factory jobs.
But the administration's insistence that the U.S. was hit with disproportionate tariffs from key trading partners "is simply not true," wrote Gregory Daco, head of U.S. Economics at Oxford Economics, in a research note.
"While average trade-weighted U.S.-imposed tariffs on its imports are lower than those imposed by the EU, Canada, Mexico and China, the difference is marginal," he noted. "Excluding agricultural products (generally more highly protected), the U.S. tariffs are similar to those from Canada and the EU, and higher than in Japan."