Gambiaj.com – (WASHIGNTON, DC) – President Donald Trump has reignited global trade tensions with the imposition of sweeping 25% tariffs on all steel and aluminum imports into the United States, a move aimed at boosting American manufacturing but one that has triggered swift retaliation from key trade partners.

The European Union and Canada, both major exporters of metals to the US, responded forcefully within hours of the announcement on Wednesday, unveiling their own countermeasures. The EU slapped tariffs on up to €26 billion ($28 billion) worth of American goods, while Canada introduced retaliatory levies on $29.8 billion CAD ($20.1 billion) of US imports, marking the first broad escalation of trade hostilities in Trump’s second term.

Canada Takes Strong Action

Canada, the largest supplier of iron, steel, and aluminum to the US, swiftly announced its countermeasures, effective Thursday. Canadian Finance Minister Dominic LeBlanc warned that further increases could follow on April 2, the date by which US Commerce Secretary Howard Lutnick is expected to finalize tariff decisions. LeBlanc, who is scheduled to meet Lutnick in Washington, stressed the need for dialogue but made it clear that Canada would not back down.

Speaking at a steel mill in Ontario, Prime Minister Designate Mark Carney directly addressed Trump for the first time since winning his party’s leadership election, calling for a renewed commitment to trade cooperation.

“We are all going to be better off when the greatest economic and security partnership in the world is renewed,” Carney said, emphasizing the need for mutual respect between neighbors.

Meanwhile, Canadian steel giant Algoma Steel (ASTL) announced it was temporarily halting all shipments to the US in response to the tariffs. The move comes as the company, a key supplier to the American market, grapples with increased uncertainty. In anticipation of the tariffs, Algoma has already laid off 20 workers, the Toronto Star reported.

Europe Retaliates Swiftly

The European Union also wasted no time in hitting back against Trump’s decision, denouncing the tariffs as “unjustified.” The bloc’s countermeasures, set to take effect in April, will target a broad range of American exports, including bourbon, motorbikes, and boats.

Trade analysts warn that the economic impact of Trump’s move could extend beyond immediate tariff costs. Economists at Nomura predict that while the direct macroeconomic effect on Europe might be small, the heightened uncertainty and potential for further tariff escalations could negatively affect global and European economic growth.

“Trump is likely to announce further tariffs on April 2, and sizable negative effects on global and European growth may hit even before major tariffs are implemented,” Nomura analysts wrote in a report Wednesday.

Global Fallout and Economic Risks

While the US had previously exempted allies like Canada, Mexico, Japan, and South Korea from similar tariffs under the Biden administration, Trump’s new round of levies leaves no country untouched. Even Australia, a traditional US ally, criticized the move, though it refrained from announcing retaliatory tariffs.

Prime Minister Anthony Albanese labeled the tariffs “entirely unjustified” and warned they would lead to slower growth and higher inflation. Similarly, Mexican President Claudia Sheinbaum said Mexico would withhold retaliation for now but left the door open for reciprocal tariffs depending on future US actions.

The long-term implications of Trump’s tariff policy remain uncertain. Although intended to boost domestic steel and aluminum production, history suggests the economic consequences could be mixed. A 2023 analysis by the International Trade Commission found that Trump’s 2018 tariffs modestly increased US metals output but resulted in over $3 billion in economic losses due to higher costs for manufacturers.

Moreover, Alcoa, one of the largest US aluminum producers, has warned that the tariffs could backfire. CEO William Oplinger cautioned that the levies could cost up to 100,000 American jobs, particularly in the aluminum industry, which relies on Canadian imports due to lower production costs in Canada.

Uncertain Future for Trade Relations

Trump has signaled that he is prepared to escalate trade disputes further. While he did not specify how he would respond to the retaliatory measures from Europe and Canada, he declared, “Of course I will respond.”

With April 2 looming as a key date for further trade decisions, the world is bracing for the next chapter in Trump’s renewed tariff battle. The stakes are high, as businesses, workers, and governments across North America and Europe navigate the uncertain terrain of escalating trade conflicts.