President Donald Trump‘s recently implemented tariffs on steel and aluminum went into effect immediately on Tuesday, inviting varying degrees of reprisal from the United States’s major trading partners.
The leader had recently announced the new metals taxes in February but delayed deployment until Tuesday to allow goods now in travel to escape the new fees and supply chains to change before being subject to improved prices.
The new 25 % rates for steel and aluminum expand on barrier taxes the president implemented during his first term in office, bumping the aluminum rate up 15 points and eliminating all exceptions issued by both the first Trump administration and former President Joe Biden. The new tariffs also cover a range of downstream products not covered by Trump’s previous levies.
Canada, the largest exporter of steel and aluminum to the U. S., and the European Union, a major source of imported steel, have responded the most forcefully.
On Tuesday, the EU targeted roughly$ 28 billion in U. S. exports to the continent, including beef, whiskey, motorcycles, and steel and aluminum. Canada similarly said it would retaliate with tariffs on$ 21 billion worth of U. S. goods but has yet to announce which sectors those barrier taxes will cover.
Like Canada, Mexico is also staring down an additional 25 % flat tariff if it doesn’t continue cooperating with the U. S. on addressing border security and the fentanyl trade. However, Mexican President Claudia Sheinbaum said Wednesday that she will hold off on retaliatory measures until April 2, when Trump is slated to announce his reciprocal tariffs on automobiles, lumber, copper, pharmaceuticals, and other goods.
Trump has also suggested that he could drop the flat 25 % tariffs on Canada and Mexico, in addition to a 20 % tariff on all Chinese imports, if those countries yield substantive progress on stemming the flow of fentanyl and precursor components to the U. S. by April.
Last week, the president allowed a one-month tariff exemption for all Canadian and Mexican companies paying into USMCA, the trade agreement Trump brokered with Canada and Mexico in 2018. Under 40 % of all Canadian and half of Mexican exports to the U. S. are USMCA compliant.
China, targeted by 20 % fentanyl-related tariffs and new steel and aluminum fees, has taken a stealthier approach to resisting Trump’s trade agenda.
Unlike Canadian and European officials, Chinese Communist Party leaders have largely avoided publicly antagonizing the Trump administration on the issue, even while rolling out retaliatory measures.
Last week, China put 15 % tariffs on critical American agricultural products such as poultry, pork, soybeans, and beef, ahead of the implementation of Trump’s steel and aluminum amendments. Beijing took similar measures during Trump’s first term before the two parties signed a new” Phase One” trade deal in early 2020.
Furthermore, last month, Beijing responded to the president’s fentanyl fees by imposing a 15 % tariff on U. S. coal and liquefied natural gas and a 10 % charge on crude oil.
Trump’s tariff agenda and his propensity to threaten increases or amendments publicly have sent shockwaves through the stock market. The S&, P 500 shrank by 8 % over the past month, while the Dow Jones and NASDAQ saw consecutive days of significant loss over the past week.
The president additionally defended his tariff strategy during his Wednesday bilateral meeting with Irish Taoiseach Micheál Martin.
Trump claimed that he has the right to “adjust” announced tariff rates and that the tariff dance requires “flexibility” to be successful. He also said that” of course”, he plans to retaliate against the EU’s own measures responding to his steel and aluminum tariffs.
” The United States of America is going to take back a lot of what was stolen from it by other countries and, frankly, by incompetent U. S. leadership”, he told reporters in the Oval Office. ” We’re going to take back our wealth, and we’re going to take back a lot of the companies that left”.
CANADA RETALIATES WITH TARIFFS WORTH$ 21 BILLION AMID TRADE WAR WITH TRUMP
The U. S. does see a trade deficit with Ireland, buoyed in large part by Irish airliner Ryanair purchasing its fleet from American manufacturers. The president has had harsh words regarding both Ireland and the EU’s trade practices.
” We do have a massive deficit with Ireland because Ireland was very smart. They took our pharmaceutical companies away from presidents that didn’t know what they were doing”, Trump said. ” The European Union has been very tough, and it’s our turn too, you know. We get a turn at that also, but they have not been fair”.
