President Donald Trump’s increased tariffs on all steel and aluminum imports came into effect on Wednesday as the United States widened its scope of levies amid a campaign to reorder trade norms in its favor.
The 25% duties on the two metals would likely push up the cost of producing items ranging from drink cans, home appliances to automobiles, leaving a looming threat of a rise in consumer prices in due course.
Also on Wednesday, the European Union announced “countermeasures” against some US goods in a tit-for-tat move against the steel and aluminum tariffs.
Trump backtracks on threat to Canada
Ahead of the tariff deadline on Tuesday, Trump threatened Canada with doubling the duty to 50% on steel and aluminum exports to the US.
The president later chose to stick to the 25% rate after the Canadian province of Ontario suspended a decision to put a surcharge on electricity sold to the American states of Michigan, Minnesota and New York.
The electricity surcharge was a retaliation to earlier US levies.
Ontario Premier Doug Ford said he would visit Washington on Thursday with Canadian Finance Minister Dominic LeBlanc for discussions with Trump officials, including Commerce Secretary Howard Lutnick, on revising the United States–Mexico–Canada Agreement (USMCA) on trade.
The USMCA was signed during Trump’s first term in office and replaced the previous NAFTA agreement.
The new levies imposed Wednesday will stack on top of earlier ones, meaning that some steel and aluminum products from Canada and Mexico will likely see a 50% tariff rate unless they are compliant with the USMCA.
Canada is the biggest foreign supplier of steel and aluminum to the US.
Brazil and Mexico are also important US suppliers of steel, while the United Arab Emirates and South Korea are among key providers of aluminum.
American steel producers hail move
US steel producers welcomed Wednesday’s move, hailing the restoration of Trump’s prior metal tariffs in 2018 which were later eroded by exemptions.
Canada and Mexico had avoided the import duties on the metals after they agreed to Trump’s demand for a revamped North American trade deal in 2020.
Other trading partners of the US had import quotas supplant the tariffs. There were also thousands of product-specific exclusions.
“By closing loopholes in the tariff that have been exploited for years, President Trump will again supercharge a steel industry that stands ready to rebuild America,” Philip Bell, the president of Steel Manufacturers Association, said.
“The revised tariff will ensure that steelmakers in America can continue to create new high-paying jobs and make greater investments knowing that they will not be undercut by unfair trade practices,” he added.
Wall Street indexes fell for a second straight day on Tuesday as Trump’s volatile trade plans have triggered concerns that they could steer the world’s biggest economy toward a recession.
The US President dismissed the losses on Wall Street, saying that he does not see the possibility of an economic downturn.
European countermeasures
The Commission said it would impose the “countermeasures to protect European businesses, workers and consumers from the impact of these unjustified trade restrictions.”
“The objective is to ensure that the total value of the EU measures corresponds to the increased value of trade impacted by the new US tariffs,” the Commission said.
“As the US are applying tariffs worth $28 billion (€26 billion), we are responding with countermeasures worth €26 billion,” Commission President Ursula von der Leyen said in a statement.
“We will always remain open to negotiation. We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs,” von der Leyen added.
What US goods will be hit with EU tariffs?
In a statement, the European Commission, which is responsible for handling trade conflicts on behalf of the EU’s 27 members, said that it was reintroducing measures put in place during the previous Donald Trump presidency when the US imposed similar tariffs.
It is also adding new measures. In all, the EU’s response will target steel and aluminum in kind, as well as textiles, leather goods, home appliances, house tools, plastics and wood.
Agricultural products will also be impacted, including poultry, beef, some seafood, nuts, eggs, sugar and vegetables.
The EU countermeasures will come into effect in two stages, von der Leyen said, with the previous measures returning on April 1 and all measures expected to be in place by April 13.
