Trump tariffs of 25% on steel and aluminum take effect, prompt quick EU announcement of in-kind retaliation
President Trump officially raised tariffs on all steel and aluminum imports to 25% on Wednesday and promised that his evoking tariff threats are Stirring the stock market And increased concerns about economic slowdowns, inflation and even global trade wars.
The EU quickly announced that it would retaliate with steps that would take effect on April 1.
“As the United States is filing for tariffs worth $28 billion, we are responding with a countermeasure worth 26 billion euros ($28 billion),” European Commission President Ursula von der Leyen said in a statement. “We will always maintain a negotiation attitude. We firmly believe that it is not in our common interest to put our economy on tariffs in a world full of geopolitical and economic uncertainty.”
French Minister of European Affairs Benjamin Haddad said the EU could develop further, adding that the trade war was not in someone’s interest.
The world’s largest trading group expects U.S. tariffs and prepares in advance, but these measures still put a lot of pressure on the already tense transatlantic relations. Washington warned Europe only last month that it would have to take care of its own safety in the future.
EU measures cover not only steel and aluminum products, but also textiles, household appliances and agricultural supplies.
Britain’s Commerce and Commerce Minister Jonathan Reynolds said “all choices are on the table “respond to the national interest”.
It also reported that Australian Prime Minister Anthony Albanese called Trump’s move “completely unreasonable … also contrary to the spirit of the lasting friendship between our two countries”, but he ruled out the responsibilities of the tit tat.
“Tariffs and escalating trade tensions are a form of economic self-harm and the secret to lower growth and inflation. They are paid by consumers,” Albanes told reporters.
Mr. Trump removed his 2018 tariff on metals in addition to increasing the tariffs on aluminum from 10% to 2018.
His move is based on February directives and is part of a broader effort to undermine and change global trade.
The president has separate tariffs on Canada, Mexico and China and plans to impose taxes on imports from the EU, Brazil and South Korea starting April 2.
Mr. Trump told the CEO at a business roundtable on Tuesday that the tariffs allowed the company to invest in U.S. factories. Over the past month, the S&P 500 has fallen by 8% as fears of worsening growth seems unlikely to stop him, as Mr. Trump believes higher tariff rates are more effective in bringing back factories.
“The higher it is, the greater the chances they will build,” Trump told the panel. “The biggest win is if they move into our country and create jobs. It’s more than the tariff itself, but the tariffs will pay a lot of money to this country.”
Mr. Trump threatened to put 50% tariffs on Canadian steel and aluminum on Tuesday, but he Choose to keep 25% Ontario province suspends plans to sell electricity surcharges to Michigan, Minnesota and New York.
Trump’s expropriation history
In many ways, the president is now talking about what he believes is unfinished from his first term. Mr. Trump meaningfully increased tariffs, but the revenue collected by the federal government is too small to significantly increase inflationary pressure.
Mr. Trump’s tariffs on steel and aluminum in 2018 were eroded by exemptions.
Canada and Mexico have avoided import taxes on metals after they agreed to his 2020 revamp of the North American trade deal. Import quotas from other U.S. trading partners replaced tariffs. If they can’t find the steel needed by domestic producers, the first Trump administration also allows U.S. companies to demand tariff exemptions.
While Mr. Trump’s tariffs could help U.S. steel and aluminum plants, they could raise prices for manufacturers that use metals as raw materials.
Furthermore, economists found that the benefits of the steel and aluminum industries were offset by the costs they imposed on “downstream” manufacturers using their products.
Among these downstream companies, production fell by nearly $3.5 billion due to tariffs in 2021, a loss exceeding the $2.3 billion increase for aluminum producers and steel manufacturers that year, and the U.S. International Trade Commission was established in 2023.
Mr. Trump believes the tariffs have led to more domestic factories, and the White House noted that Volvo, Volkswagen and Honda are all exploring their U.S. footprint. However, the prospect of higher prices, reduced sales and lower profits may cause some companies to avoid investing in new facilities.
“If you’re an executive on the board, do you really want to tell your board that it’s time to expand that assembly line?” said John Murphy, senior vice president of the U.S. Chamber of Commerce.
Lutnik defends Trump’s economic policy
Commerce Secretary Howard Lutnick said in an interview with CBS News on Tuesday that the president’s economic policy is “worth it.”
exist Recent interviews With Fox News, Mr. Trump’s refusal to exclude his policies, including increasing tariffs, could lead to a recession.
But Lutnick denied that there was any confusion in the way the president has been using tariffs to put pressure on U.S. trading partners.
“It’s not chaos, the only person who thinks it’s chaos is a stupid person,” Lutnik said.
