U.S. trade wars with Canada and the European Union intensified on Wednesday, with President Donald Trump and the United States’ normally allied countries imposing new levies on each other. The United States enacted 25% tariffs on all steel and aluminum imports on 35 countries, including Canada and the 27-nation EU, and ending previous exemptions that also had been in place for imports from Argentina, Australia, Brazil, Britain, Japan, Mexico and South Korea. “In my judgment, these modifications are necessary to address the significantly increasing share of imports of steel articles and derivative steel articles from these sources, which threaten to impair U.S. national security,” Trump said in a proclamation announcing the tariffs. Canada immediately imposed new tariffs on $20.7 billion worth of U.S. exports to its northern neighbor, while the EU announced retaliatory trade action with new duties on U.S. industrial and farm products. The new EU measures will apply to about $28 billion worth of U.S. goods and not just steel and aluminum products, but also textiles, home appliances and agricultural goods. Motorcycles, bourbon, peanut butter and jeans also will be hit, as they were during Trump’s first term that ran from 2017 to 2021. The EU duties aim for political pressure points in the U.S. while minimizing additional damage to Europe. EU officials have said that its tariffs, which are paid by importing companies and the cost of which is then mostly passed on to consumers, are aimed at products from states dominated by Republicans like Trump, such as beef and poultry from Kansas and Nebraska, wood products from Alabama and Georgia, and liquor from Kentucky and Tennessee. Yet the EU tariffs will also hit Democratic-dominated states such as Illinois, the top U.S. producer of soybeans, which is also on the list. Spirits producers have become collateral damage in the steel and aluminum dispute. The EU move “is deeply disappointing and will severely undercut the successful efforts to rebuild U.S. spirits exports in EU countries,” said Chris Swonger, head of the Distilled Spirits Council of the United States. The EU is a major destination for U.S. whiskey, with exports surging 60% in the past three years after an earlier set of tariffs was suspended. European Commission President Ursula von der Leyen said in a statement that the bloc “will always remain open to negotiation.” “As the U.S. are applying tariffs worth $28 billion, we are responding with countermeasures worth 26 billion euros,” she said. “We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs,” von der Leyen said. Trump has said that his tariffs would push foreign manufacturers to end their overseas operations and move them to the U.S. to help create U.S. factory jobs. In a meeting at the White House, Trump told Micheal Martin, the Irish prime minister, “We’re going to be doing reciprocal tariffs” against the EU. “So, whatever they charge us, we’re charging them. Nobody can complain about that.” But von der Leyen rebuffed the U.S. leader, saying, “Jobs are at stake. Prices will go up in Europe and in the United States.” “We deeply regret this measure,” she said. “Tariffs are taxes. They are bad for business, and even worse for consumers. These tariffs are disrupting supply chains. They bring uncertainty for the economy,” she said. The American Chamber of Commerce to the EU said the U.S. tariffs and EU countermeasures “will only harm jobs, prosperity and security on both sides of the Atlantic. … The two sides must de-escalate and find a negotiated outcome urgently.” Canadian Finance Minister Dominic Leblanc said Ottawa’s new tariffs that take effect Thursday will hit such products as computers and sports equipment and were in response to Trump’s new 25% duty on Canadian aluminum and steel, which Leblanc said was “unjustified and unreasonable.” Australian Prime Minister Anthony Albanese called the U.S. action “entirely unjustified” but ruled out imposing retaliatory tariffs. “Tariffs and escalating trade tensions are a form of economic self-harm and a recipe for slower growth and higher inflation. They are paid by the consumers. This is why Australia will not be imposing reciprocal tariffs on the United States,” Albanese said. Canada was spared an even higher set of tariffs after Trump backed down from his threat on Tuesday to push duties on Canadian steel and aluminum to 50%. Trump ignited an economic war last week with Canada, normally a staunch ally and the second biggest U.S. trading partner after Mexico, by first imposing and then delaying for a month a 25% tariff on all products exported to the United States. Trump said he is pressuring Canada to further curb the flow of migrants and illicit drugs, especially the deadly opioid fentanyl, into the United States. Trump hit Mexico with the same levy but also delayed it until early April after Mexican President Claudia Sheinbaum ramped up controls at its northern border with the U.S. Mexico will not immediately retaliate against steel and aluminum tariffs, Sheinbaum said at a news conference on Wednesday. She said Mexico will wait until next month to see if it needs to strike back. “We’re going to wait until April 2 and then decide whether or not to impose reciprocal tariffs, in the case of aluminum and steel,” said Sheinbaum, who has vowed to seek a negotiated solution with Trump. Doug Ford, Ontario’s provincial leader, imposed a 25% levy on electricity sold to 1.5 million American customers, drawing Trump’s ire and the threat to double the 25% steel and aluminum tariffs. But U.S. and Canadian officials spoke Tuesday and agreed to backtrack, with Ontario canceling the electricity levy and the Trump administration dropping the steel and aluminum tariffs back to 25%. Outgoing Canadian Prime Minister Justin Trudeau retaliated to Trump’s targeting of Canadian goods last week by announcing increased tariffs on U.S. exports. Mark Carney, who is set to become prime minister in the coming days, said Tuesday that the government’s response will maximize impact on the United States and minimize impact on Canada. “My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade,” Carney said in a statement. Trump has further stoked tensions with Canada by repeatedly suggesting it become the 51st U.S. state. “This would make all Tariffs, and everything else, totally disappear,” Trump said Tuesday on his Truth Social platform. “Canadians’ taxes will be very substantially reduced, they will be more secure, militarily and otherwise, than ever before, there would no longer be a Northern Border problem, and the greatest and most powerful nation in the World will be bigger, better and stronger than ever — and Canada will be a big part of that.” Trump’s trade wars with Canada and Mexico, which he also hit last week with a new 25% levy on exports before delaying it, have sent jitters through Wall Street. Stock indexes have plunged for days, wiping out vast market gains for wealthy Americans, along with much more modest profits for everyday investors. In trading Wednesday, the benchmark Dow Jones average of 30 key stocks dropped a fraction of a point, but two other indexes advanced, the broader S&P 500 and the tech-heavy Nasdaq. Some information for this story was provided by The Associated Press, Agence France-Presse and Reuters.
