EU Braces for Trade Tensions as Trump Delays Tariffs on Wood Products and Expands Carbon Border Measures in 2026

Welcome to European Union Tariff News and Tracker, listeners. As we kick off 2026, the US under President Donald Trump has delayed key tariff hikes on finished wood products like upholstered furniture, kitchen cabinets, and vanities until January 1, 2027, according to Tocco Earth. This keeps current rates at 25% steady, sparing the EU from steeper jumps—originally 30% on furniture and up to 50% on cabinets for non-agreement countries—while capping EU tariffs at 15%, as Trump cited ongoing negotiations.

Tocco Earth reports this extension preserves pricing for EU exporters amid US reliance on imports from China, Vietnam, Mexico, and Canada, with IKEA eyeing more US sourcing—only 15% of its American products are domestic now, versus 70% in Europe. Meanwhile, Reuters via Tocco Earth notes IKEA's pivot signals broader supply chain shifts.

On electric vehicles, Most Favoured Nation substack highlights a looming EU-UK tariff cliff: rules of origin derogations expire end-2026, demanding 55% EU/UK vehicle value and EU/UK-originating batteries with active cathode material, or face 10% duties. Trade expert Sam Lowe of Flint Global warns insufficient local CAM production—mostly from Umicore in Poland and BASF/CATL in Germany—makes cheap Chinese alternatives tempting, even with tariffs, potentially stalling domestic battery markets.

Broader US-EU tensions simmer. E&E News reveals the EU eyes expanding its Carbon Border Adjustment Mechanism in 2028 to 180 steel- and aluminum-heavy goods like clothes washers and car parts, exempting nations with equivalent carbon pricing—but not the US. Atlantic Council notes US tariffs hit century-highs in 2025, with a National Security Strategy eyeing Europe warily. AOL Finance tracks Trump tariff impacts on popular European cars, while Food Business News says the US will ease duties on Italian pasta.

These moves underscore Trump's aggressive trade stance clashing with EU defenses—stay tuned as negotiations unfold.

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