US trading partners hit back on steel, aluminium tariffs
The European Union swiftly unveiled counter-tariffs hitting some $28 billion of US goods in stages from April, while Canada announced additional levies on $20.7 billion of American products from Thursday.
FILE: Former US President and 2024 Republican presidential nominee Donald Trump speaks during the National Association of Black Journalists annual convention in Chicago, Illinois, on 31 July 2024. Picture: AFP
WASHINGTON, UNITED STATES - Major US trading partners announced countermeasures Wednesday after Donald Trump's blanket tariffs on steel and aluminium imports took effect, prompting the president to vow a further response.
The steep 25% levies came into place after midnight with no exemptions despite countries' efforts to avert them, in a step up from fresh duties Trump already imposed on Canada, Mexico and China since returning to the White House.
The European Union swiftly unveiled counter-tariffs hitting some $28 billion of US goods in stages from April, while Canada announced additional levies on $20.7 billion of American products from Thursday.
China vowed "all necessary measures" in response - as Washington edged toward an all-out trade war with allies and competitors alike.
European Commission chief Ursula von der Leyen said she deeply regrets the countermeasures but maintained the retaliation affecting products ranging from bourbon to motorbikes is "strong but proportionate."
Trump told reporters Wednesday that Washington would "of course" respond to the retaliation.
"We've been abused for a long time and we will be abused no longer," he said, adding that the United States would "win that financial battle" with the EU.
Canada, which is heavily exposed to the US steel and aluminium levies, said its new tariffs will hit steel products, aluminium, and goods ranging from computers to sports equipment.
But Canada's incoming prime minister Mark Carney later said that he was ready to negotiate directly with Trump on a renewed trade accord to avoid further economic tussling.
His country supplied about half of US aluminium imports and 20% of its steel imports, according to a recent note by EY chief economist Gregory Daco.
Besides Canada, Brazil and Mexico are also key US suppliers of steel, while the United Arab Emirates and South Korea are among the major providers of aluminium.
Wednesday's levies stack atop earlier ones.
'ENOUGH WAR'
US Trade Representative Jamieson Greer criticized the EU's promises of retaliation, calling the bloc's economic policies "out of step with reality" while blaming it for failing to help address global excess capacity.
"The EU's punitive action completely disregards the national security imperatives of the United States – and indeed international security," Greer said.
This came shortly after EU Council chief Antonio Costa called on Washington to de-escalate the situation and enter dialogue.
"I think we have enough war in the world, we need to stop the wars we have and not create a trade war," Costa said.
German Chancellor Olaf Scholz, head of Europe's largest and heavily export-oriented economy, condemned Washington's moves as "wrong" and warned of increased inflation.
Beijing's foreign ministry said "there are no winners in trade wars."
China is the world's leading steel manufacturer, although not a major exporter of the product to the United States.
Trump's steel and aluminium tariffs will likely balloon costs of producing goods from home appliances to automobiles and cans used for drinks, threatening to raise consumer prices down the road, experts say.
Auto manufacturing and construction are among the biggest users of steel in the country, noted Cato Institute research fellow Clark Packard.
'MASSIVE UNCERTAINTY'
Uncertainty over Trump's trade plans and worries that they could tip the world's biggest economy into a recession have roiled financial markets. Major Wall Street indexes tumbled for two days before regaining some ground.
Markets in Asia, including Hong Kong and Shanghai, were down on Wednesday.
Even before the latest US tariffs took effect, manufacturers moved to find cost-effective domestic suppliers.
The mere threat of protectionism, said the Cato Institute's Packard, has allowed US steel and aluminium firms to raise their prices.
"It's creating massive amounts of uncertainty," he added.
Trump also targeted both metals in his first presidency.
He has promised further "reciprocal tariffs" from April 2 to tackle what Washington considers unfair behaviour.
The lack of exemptions Wednesday came despite US partners, including Australia and Japan, pushing for exclusions.
Tokyo expressed regret it had not succeeded while Australian Prime Minister Anthony Albanese called the tariffs unjustified. Both Canberra and London stopped short of retaliation.