On Wednesday, new tariffs of 25% went into effect for all steel and aluminum imports entering the United States. This marked the end of exemptions that had been in place for a number of allied countries.
The decision affects imports from Argentina, Australia, Brazil, the UK, Canada, Japan, Mexico, South Korea, and the European Union.
“In my judgment, these changes are necessary to reduce the significant and growing weight of steel and steel product imports from these countries, which threaten the national security of the United States,” said President Donald Trump in a statement announcing the tariffs.
The European Union responded on Wednesday, announcing that it would impose tariffs on $28 billion worth of American goods starting in April.
“We will always remain open to negotiations. We strongly believe that in a world filled with geopolitical and economic uncertainty, it is not in our mutual interest to burden our economies with tariffs,” said European Commission President Ursula von der Leyen in a statement.
Australian Prime Minister Anthony Albanese called Washington’s decision “completely unjustified” but ruled out the possibility of imposing reciprocal tariffs.
“Tariffs and escalation of trade tensions are a form of self-inflicted economic harm and a recipe for slower economic growth and higher inflation. They are paid by consumers. This is why Australia will not impose reciprocal tariffs on the United States,” Albanese said on Wednesday.
On the same day, Canada announced that it would impose tariffs on $29.8 billion worth of American goods, which will take effect on Thursday morning. The announcement was made by Canadian Finance Minister Dominic LeBlanc.
The Canadian tariffs will target steel products worth $12.6 billion, aluminum products worth $3 billion, and additional American goods worth $14.2 billion.
Canada is the largest supplier of steel and aluminum to the United States.
Products affected by Canada’s counter-tariffs include computers, sporting equipment, and cast iron products, according to LeBlanc in a press conference.
Meanwhile, yesterday, President Trump withdrew his decision to double tariffs on Canadian steel and aluminum, from 25% to 50%.
Last week, President Trump ignited an economic war with Canada, a traditionally staunch ally of the United States and its second-largest trading partner after Mexico, by initially announcing, then delaying by a month, a 25% tariff on all Canadian products.
President Trump said he was pressuring Canada to further curb the flow of immigrants and drugs, mainly fentanyl, entering the United States.
In response, Ontario province imposed a 25% tariff on electricity sold to 1.5 million American customers, a move that angered President Trump, who threatened to double tariffs on Canadian steel and aluminum (from 25% to 50%).
However, after discussions, American and Canadian officials agreed on Tuesday to change course. Ontario canceled the electricity tariff, and the Trump administration reduced steel and aluminum tariffs back to 25%.
Last week, in response to Washington’s tariff announcements, outgoing Canadian Prime Minister Justin Trudeau announced increased tariffs on American products.
Mark Carney, Canada’s future prime minister, said on Tuesday that the goal of his future government would be to minimize the impact of the tariffs on the country.
“My government will keep the tariffs in place until the Americans show respect and reliably commit to free and fair trade,” Carney said in a statement.
President Trump further raised tensions with Canada by suggesting that the country become the 51st state of the United States.
“This would eliminate all tariffs and everything else,” President Trump wrote on Tuesday on his social media platform, “Truth Social.”
“Canadian taxes would drop significantly, they would be safer than ever before, both militarily and generally. They would no longer be a problem, and the largest and most powerful nation in the world would be even bigger, better, and stronger than ever – and Canada would be an important part of it.”
President Trump said that Canada’s national anthem could still be sung “but now representing a great and powerful state within the greatest nation the world has ever seen,” reports VOA.
Trump’s trade war with Canada and Mexico has caused a sharp drop in stock prices for days, affecting not only wealthy Americans but also the savings of many modest investors.
