The United States expanded its tariff measures on Wednesday, implementing sweeping levies on steel and aluminum imports with “no exceptions or exemptions,” as promised by the White House. This move comes despite ongoing efforts by other countries to avoid the tariffs.
President Donald Trump’s 25 percent duties on both metals are expected to increase the cost of manufacturing various goods, from home appliances to automobiles and beverage cans, potentially driving up consumer prices in the future.
“It wouldn’t surprise me to see the tariffs quickly reflected in prices,” Clark Packard, a research fellow at the Cato Institute, told AFP. He added that sectors such as auto manufacturing and construction — particularly in residential and commercial buildings — are among the largest consumers of steel in the U.S.
In response, the European Commission announced it would impose “a series of countermeasures” starting April 1, citing the “unjustified trade restrictions” from the U.S. “We deeply regret this measure,” European Commission President Ursula von der Leyen said in a statement. “As the U.S. is applying tariffs worth $28 billion, we are responding with countermeasures of equivalent value in euros.”
Since returning to office, Trump has imposed steep tariffs on major U.S. trading partners, including Canada, Mexico, and China. While some rollback measures have been applied to his neighbors, Trump has vowed fresh levies beginning April 2.
Canada will be significantly impacted by the latest tariffs, as it supplies about half of U.S. aluminum imports and 20 percent of U.S. steel imports, according to Gregory Daco, chief economist at EY. Brazil and Mexico are also major U.S. steel suppliers, while aluminum comes from countries like the United Arab Emirates and South Korea.
The new levies compound existing tariffs, meaning steel and aluminum products from Canada and Mexico could face a 50 percent tariff unless compliant with the U.S.-Mexico-Canada Agreement (USMCA).
Trump’s trade policies have led to market volatility, with Wall Street indexes falling for the second consecutive day on Tuesday. However, Trump downplayed concerns about a potential recession, saying he does not foresee a downturn and dismissed Wall Street losses.
‘Bumpy’ transition
Trump’s trade policies have been marked by volatility, with the president threatening to double tariffs on Canadian steel and aluminum to 50 percent just a day before the new levies were set to take effect.
Tensions escalated when Canada’s Ontario province threatened to impose an electricity surcharge on three U.S. states in retaliation, triggering a furious response from Trump. However, Ontario eventually halted the surcharge after discussions with Washington.
White House spokesperson Kush Desai stated that Trump “used the leverage of the American economy” to “deliver a win for the American people.” A meeting is scheduled for Thursday between Ontario Premier Doug Ford, U.S. Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer to discuss a renewed USMCA ahead of the April 2 reciprocal tariff deadline, according to a joint U.S.-Canada statement.
White House senior counselor Peter Navarro described the tariff process as “a negotiation” and acknowledged that “it’s going to be at times, perhaps a little bumpy.”
Massive uncertainty
Even before the tariffs took effect, manufacturers scrambled to find cost-effective domestic suppliers. The mere threat of protectionism, Packard said, has allowed U.S. steel and aluminum firms to raise their prices, creating “massive amounts of uncertainty.”
While some U.S. manufacturers using American steel view the tariffs positively, as they have boosted business, others warn that the levies only add to the cost of imports, making domestically produced goods equally expensive.
Daco of EY pointed out that the new tariffs go beyond measures imposed in 2018, covering a broader range of finished products in addition to raw steel and aluminum. The higher rates on aluminum imports, combined with the new restrictions, are “likely to make foreign sourcing more expensive across multiple industries.”
Despite recent visits by U.S. partners such as Australia and Japan to request exemptions, the tariffs were imposed without exceptions. Australian Prime Minister Anthony Albanese called the tariffs “entirely unjustified,” though he emphasized that Australia would not retaliate.
It remains unclear if Trump will, as in his first term, eventually grant relief to certain countries or negotiate deals with others. Looking ahead, Trump has pledged to impose separate reciprocal levies beginning April 2, targeting unfair trade practices. This raises the possibility of more tariffs on specific products and trading partners.
AFP
