The Trump administration raised tariffs on global steel and aluminum imports to 25% Wednesday as President Donald Trump and his administration dig in on trade policies that have rocked financial markets.
Allies of the U.S., such as the European Union, responded in kind with a hail of criticism and reciprocal tariffs. The E.U. announced retaliatory tariffs early Wednesday on $28 billion worth of a wide range of U.S. goods imported to Europe such as boats, motorbikes and alcohol.
Trump announced the tariffs last month and the White House said Wednesday that there would be no exceptions.
“President Trump has once again used the leverage of the American economy, which is the best and biggest in the world, to deliver a win for the American people,” White House spokesperson Kush Desai said in a statement.
Calling the new U.S. tariffs “unjustified,” the European Commission said that the levies would kick in on April 1, with additional countermeasures introduced in mid-April.
Investors appeared unfazed as they sent U.S. stock futures higher in advance of the release of the latest Consumer Price Index report Wednesday, though major stock indexes remain sharply lower in recent weeks. The S&P 500 is down almost 9% from its February high, putting it in correction territory.
While President Trump has suggested he wants to negotiate a broader trade agreement with the U.K., Britain did not escape the taxes. U.K. business and trade secretary Jonathan Reynolds called the levies “disappointing,” but said his country was “focused on a pragmatic approach” and negotiating a broader deal.
The European reaction echoed that of Canada, another of America's traditional close allies and trading partners, on which Trump had already imposed a 25% metals tax.
New tariffs were briefly expected to go even higher for Canada, the top U.S. export market. Trump said Tuesday they would jump to 50% in response to Ontario Premier Doug Ford’s threat to impose a 25% surcharge on electricity imports into the United States to match the initial U.S. hike.
A conversation between Ford and Commerce Secretary Howard Lutnick prevented this, however, with Trump indicating a doubling of U.S. tariffs for Canada was no longer likely.
In a joint statement with Lutnick posted on X, Ford said they would meet Thursday alongside the U.S. trade representative to discuss renewing the U.S.-Mexico-Canada free trade act.
In a Truth Social post Monday, Trump called Canada a longtime “tariff abuser,” going beyond his metals threats to say that “The United States is not going to be subsidizing Canada any longer,” and that “We don’t need your Cars, we don’t need your Lumber, we don’t your Energy, and very soon, you will find that out.”
Other longtime U.S. allies also failed to escape.
Australia, which had been hoping for the same exemption from steel and aluminum tariffs it received during the first Trump administration, said it would not retaliate.
Australian Prime Minister Anthony Albanese called the tariff “entirely unjustified,” but added that imposing reciprocal tariffs “would only push up prices for Australian consumers,” and that Australia would impose no new tariffs on U.S. goods.
China, the world’s largest steel producer and second-largest economy, accused the U.S. of violating World Trade Organization rules and said it would take “all necessary measures” to protect its rights and interests.
“No one wins in a trade war or a tariff war, a view widely shared by the international community,” foreign ministry spokesperson Mao Ning said at a media briefing.
China had already been slapped with a 20% blanket tariff on Trump’s return to office, and announced new tariffs in return.
America’s Asian allies South Korea and Japan — both are major steel producers — were also hit.
South Korea, which Trump singled out in his address to Congress last week over its tariff policies, is scrambling to minimize the impact of U.S. tariffs on its domestic industries. Trade Minister Cheong In-kyo’s office said Wednesday he will be in Washington for two days starting Thursday for tariff discussions.
Yoshimasa Hayashi, the Japanese government’s top spokesperson, told reporters in Tokyo it was “regrettable” that the new U.S. tariffs had been imposed “without excluding Japan.”
Stock market investors have made their feelings about the tariffs clear, with major indexes plunging on Trump's earlier tariff threats, before rallying on the suspension announcement for Canada.
Pre-market futures for the Dow Jones Industrial Average, the S&P 500 and the Nasdaq all inched higher early Wednesday after plunging in recent days.
Aside from steel and aluminum, Trump on Tuesday called on Canada to drop its duties on U.S. dairy products and threatened to "substantially increase" tariffs on cars imported into the United States if Canada did not drop "other egregious, long time tariffs."
The auto tariffs, Trump warned, without citing evidence, “essentially, permanently shut down the automobile manufacturing business in Canada.” He also doubled down on some of his recent rhetoric about making Canada part of the United States.
Canada has quickly emerged as a target of Trump’s ire in his second term. Trump this month instituted, then pulled back, tariffs on a variety of Canadian goods as he goaded its leaders and blamed them for a lack of action on fentanyl trafficking.
Relatively little of the drug is seized at the U.S.'s northern border compared with that with Mexico.
While Mexico has faced similar tariff threats and rhetoric, its president, Claudia Sheinbaum, has succeeded in assuaging Trump.
Newly appointed Canadian Prime Minister Mark Carney subsequently called Trump's threats "an attack on Canadian workers, families and businesses."
He said Canadian tariffs on U.S. goods would remain "until the Americans show us respect and make credible, reliable commitments to free and fair trade."
Morgan Stanley analysts warned that because the United States is a net importer of steel and aluminum from Canada, the tariffs would lead to higher domestic prices.
