Trump’s Steel and Aluminum Tariffs Lead to European, Canadian, and Other Countries’ Retaliation

Trade tensions have escalated as a result of Canada, Europe, and other countries swiftly retaliating against Trump’s new steel and aluminum tariffs.

President Donald Trump stepped up his campaign to rearrange global trade in favor of the US on Wednesday by imposing higher tariffs on all US imports of steel and aluminum. Canada and Europe quickly retaliated.

By restoring effective 25% tariffs on all imports of the metals, Trump’s move to strengthen protections for American steel and aluminum producers extends the charges to hundreds of downstream items, ranging from nuts and bolts to soda cans and bulldozer blades.

According to US Commerce Secretary Howard Lutnick, Trump would also implement trade restrictions on copper, and nothing could stop the tariffs.

The United States’ largest foreign supplier of steel and aluminum, Canada, announced 25% retaliatory duties on a total of C$29.8 billion worth of goods, including computers, sports equipment, steel, and aluminum.

Since taking office in January, Trump’s obsession with tariffs has shaken investor, consumer, and corporate confidence in ways that economists fear could lead to a US recession and further lagging behind the rest of the world economy.

The European Commission, the EU’s executive branch responsible for coordinating trade issues, reacted quickly, announcing that starting next month, it will slap counter-tariffs on up to 26 billion euros ($28 billion) worth of US goods, frequently with more symbolic than economic effects.

However, Ursula von der Leyen, the president of the Commission, informed reporters that she had assigned Trade Commissioner Maros Sefcovic to continue discussing the issue with U.S. officials.

She stated, “We firmly believe that it is not in our common interest to burden our economies with such tariffs in a world fraught with geo-economic and political uncertainties.”

Japan’s Chief Cabinet Secretary Yoshimasa Hayashi stated that the action might significantly affect US-Japan trade relations, while China’s foreign ministry stated that Beijing would take all necessary steps to protect its rights and interests.

Close allies of the United States The sweeping tariffs were denounced by both Australia and Britain; Australian Prime Minister Anthony Albanese called the action “against the spirit of our two nations’ enduring friendship.” Both nations, however, disregarded immediate tit-for-tat duties.

Despite enjoying some degree of exclusions or quotas, South Korea, Mexico, and Brazil were the other nations most impacted by the tariffs.

For the time being, the EU’s 27 member states are less affected. Since “only a small fraction” of the targeted products are exported to the US, the Kiel Institute in Germany calculated that the impact on EU output would be a mere 0.02 percent.

Dental floss, diamonds, bathrobes, and bourbon products are some of the EU’s own countermeasures, and they also make up a tiny percentage of the massive EU-US trade relationship.

However, France’s Europe Minister Benjamin Haddad cautioned that the EU might broaden its response to cover intellectual property or digital services.

After Canada’s Ontario province halted a plan to levy a 25% surcharge on power exports to certain US states, Trump withdrew his earlier threat to double the duty to 50% on Canada’s steel and aluminum exports to the US.

Lutnick told Fox Business Network that he will wait for Mark Carney to be appointed prime minister of Canada before engaging in national trade negotiations, but he intends to meet with Ontario Premier Doug Ford to “lower the temperature.”

The US financial markets, which were already uneasy due to Trump’s extensive tariff onslaught, were rocked by that occurrence. Asian and European markets were mostly stable on Wednesday, with the tariff hike being widely anticipated. Meanwhile, US stocks began higher on Wednesday following data indicating a falling rate of inflation.

However, all of the gains made by Wall Street after Trump’s election were erased by a sharp selloff in US stocks in March.

Businesses are uneasy as a result of the tariff back and forth, which is upending sectors like energy and automobiles.

According to Stephen Dover, chief market analyst at Franklin Templeton, “almost everyone in the economy is struggling to comprehend wild swings in Washington policies, and their implications for everyday decisions.”

Porsche, a luxury automaker, stated that it was determining how to charge customers for tariffs.

US steel producers applauded the action on Wednesday, pointing out that several loopholes had undermined Trump’s 2018 tariffs.

President Philip Bell of the Steel Manufacturers Association stated, “President Trump will once more turbocharge a steel industry that stands ready to rebuild America by closing loopholes in the tariff that have been exploited for years.”

As Prime Minister Justin Trudeau gets ready to cede power to his successor, Mark Carney, who emerged victorious in the ruling Liberals’ leadership contest last weekend, the US-Canada trade battle escalated.

On social media, Trump reiterated his desire for Canada to become “our cherished Fifty First State.”

If US tariffs continue, Canada may implement non-tariff measures including limiting oil supplies to the US or imposing export taxes on minerals, Canadian Energy Minister Jonathan Wilkinson told Reuters.

Thanks to inexpensive hydropower resources, Canada has established a dominant position in the US aluminum market, while US smelters that were once resurrected by Trump’s tariffs have been dormant.