In a bold move that has intensified global trade tensions, the United States has imposed new tariffs on Chinese imports, raising levies to at least 20%. This latest maneuver by President Donald Trump also includes a threat to impose tariffs on copper, lumber, and cars. The European Union estimates that these US tariffs impact approximately 5% of its total exports to America. Meanwhile, Canada faces significant challenges as the US serves as the destination for nearly 90% of its steel and aluminum exports.
Trump has moved forward with a comprehensive plan to expand US tariffs on steel and aluminum, implementing a blanket duty of 25%. This action marks the end of certain exemptions previously granted for shipments from select countries. As tensions rise, President Trump has conveyed his intention to respond to countermeasures with "reciprocal" tariffs next month on countries worldwide.
"Whatever they charge us with, we're charging them." – Donald Trump
The financial markets responded to the announcement with mixed reactions. The Dow Jones Industrial Average closed down by 0.2%, while the S&P 500 ended nearly 0.5% higher. Meanwhile, the Nasdaq surged with a 1.2% gain.
In retaliation, both the European Union and Canada have introduced their own tariffs targeting a range of US products. The EU plans to increase its levies on up to €26 billion worth of US goods, including boats, bourbon, and motorbikes. In parallel, Canada has announced a 25% tax on nearly C$30 billion worth of US products, encompassing steel, computers, and sports equipment.
"Tariffs are taxes. They are bad for business and worse for consumers." – Ursula von der Leyen
"Nobody needs that – on both sides, neither in the European Union nor in the United States." – Ursula von der Leyen
The escalating trade war is expected to reduce demand for steel and aluminum globally. This development has rattled financial markets as concerns grow regarding the potential repercussions on economies and consumers worldwide. Industry leaders and politicians alike are voicing their apprehensions about the broad economic impact of these tariffs.
"Like everybody else, I'm disappointed to see global tariffs in relation to steel and aluminium but we will take a pragmatic approach." – Sir Keir Starmer
"They're doing what they should be doing perhaps for the European Union but it does create ill will." – Donald Trump