US President Donald Trump has pledged to impose additional tariffs in response to retaliatory measures from the European Union (EU) and Canada after his latest round of import taxes on steel and aluminum. Trump warned that he would introduce “reciprocal” tariffs next month, stating, “Whatever they charge us with, we’re charging them.” This marks an escalation in the ongoing trade war, which has caused anxiety in global financial markets due to the potential economic impact on economies, consumers, and businesses worldwide.
On Wednesday, Trump moved ahead with plans to broaden US tariffs on steel and aluminum, imposing a 25% blanket duty and ending previously granted exemptions for certain countries. This move follows a previous decision to raise tariffs on Chinese imports by at least 20%. Additionally, Trump has threatened to impose tariffs on various other items, including copper, lumber, and cars.
In response, Canada and the EU announced their own retaliatory tariffs. Canada began charging a 25% tax on approximately C$30 billion ($20 billion) worth of US goods, including steel, computers, and sports equipment. Meanwhile, the EU announced it would raise tariffs on US goods worth up to €26 billion ($28 billion), including products such as boats, bourbon, and motorcycles, starting April 1. EU President Ursula von der Leyen described the EU’s response as “strong but proportionate” and emphasized that dialogue was still possible.
Leaders from other countries, including the UK, Australia, Mexico, and Brazil, refrained from immediate retaliation but indicated they would keep all options on the table as they seek to negotiate trade deals with the US. UK Prime Minister Sir Keir Starmer expressed disappointment over the global tariffs but indicated a pragmatic approach, adding that discussions could lead to a renewed trade agreement with Trump.
The new tariffs, according to critics, could raise prices for US consumers and hinder economic growth, particularly in industries reliant on imported goods. Major food companies like PepsiCo, Quaker Oats, and Folgers coffee have requested exemptions from tariffs on imports like cocoa, tropical fruits, and certain steel products, which are not available domestically. The tariffs are expected to lead to reduced demand for steel and aluminum outside the US, affecting metal producers globally.
Shares in the US showed mixed results on Wednesday, with the Dow closing down 0.2%, while the S&P 500 rose nearly 0.5%, and the Nasdaq jumped 1.2%. Trump reiterated his stance on trade, specifically calling out EU trade policies, including legal penalties imposed on Apple and rules that he believes disadvantage US farm products and cars. He added that he plans to win the trade conflict with the EU, emphasizing his commitment to protecting US interests.
