The European Commission offered the strongest reaction so far to Trump’s latest trade offensive. It launched “swift and proportionate countermeasures” on U.S. imports, reimposing balancing measures from 2018 and 2020 and adding a new list of industrial and agricultural goods. The EU’s countermeasures will apply to U.S. goods exports worth up to €26 billion (US$28.4 billion)—matching the economic scope of the U.S. tariffs, it said.

“We deeply regret this measure,” European Commission President Ursula von der Leyen said in a statement. “Tariffs are taxes. They are bad for business and even worse for consumers.”

Canada on Wednesday also announced 25 percent tariffs on about C$30 billion (US$20.8 billion) of U.S.-made products. The measures will target steel and aluminum as well as other consumer items such as computers and sporting goods. The duties match the new U.S. metals levies “dollar for dollar” and will take effect tomorrow morning, at 12:01 a.m. New York time, Canadian Finance Minister Dominic LeBlanc said.

Yet Trump’s move drew only veiled threats against American exports from most U.S. trading partners, as governments opted for negotiations to avoid tit-for-tat tariff wars. That lack of a fast and broad escalation presages complex talks in the months ahead over the United States’ desire for broadly defined “reciprocal” tariffs set with each country individually. When the midnight deadline for the metal tariffs passed with no exemptions offered, major Asian producers including South Korea, Taiwan, Japan, and Australia held off on immediate retaliation. The UK said it would focus on “rapidly negotiating a wider economic agreement.” Brazil also said it would seek to broker an alternative with the Trump administration before considering retaliatory measures, and Mexico said it will wait to respond until further U.S. tariffs are announced after April 2.

China, which wasn’t explicitly targeted in the latest trade salvo, didn’t immediately respond—but it did summon Walmart Inc., following reports that the U.S. retailer was urging Chinese suppliers to help absorb higher costs.

Politically, Trump’s move to widen his trade offensive comes at a hazardous juncture seven weeks into his second term. His rapid effort to rewire the U.S. economy as a global manufacturing power has rattled financial markets, spooked consumers still haunted by pandemic-era inflation, and fueled recession fears amid mounting uncertainty for corporate America.

Trump pressed on with the metals tariffs despite a flurry of last-minute lobbying from U.S. stakeholders, including the country’s largest aluminum producer, Alcoa Corp. The company warned that the tariffs would imperil tens of thousands of jobs while raising prices for Americans already feeling their household budgets squeezed. However, the president did have the backing of some domestic industry executives, who say the protectionist measures could raise profits for U.S. producers and bring steel and aluminum jobs back from overseas.

Steel and aluminum levies are part of Trump’s plan to build significant barriers around the U.S. economy, moves he has cast as necessary to rebalance a global trading system that is “ripping off” the nation. Yet his indecision on some duties has raised questions about his resolve.

Last week, Trump allowed 25 percent tariffs on Canada and Mexico to take effect, but within days announced a month-long exemption for goods covered by the North American trade agreement. At the same time, he doubled a similar tariff on China to 20 percent. Trump’s steel and aluminum orders revive and expand his 2018 levies on the metals and prohibit exemptions for products made from either of them. That means that, in addition to raw steel and aluminum, some $150 billion worth of imported consumer goods will be hit with the new tariffs, according to research from Global Trade Alert.

Trump’s first administration granted exclusions for major suppliers, including Canada, Mexico, Brazil, and the EU, so that some months, fewer than half of imports were covered by the tariffs. Administration officials have warned not to expect future carve-outs.

Trump has also opened the door to tariffs on copper, a critical mineral for the global economy, by directing the Commerce Department to investigate trade restrictions.

Anxiety Abounds Worldwide

Anxiety that tariffs and Trump’s government downsizing push will stifle U.S. growth has fueled a three-week stretch of volatility in global markets. “Traders and investors do feel the heat from these tariffs rising,” said Kok Hoong Wong, head of institutional equities sales trading at Maybank Securities in Singapore. “We are increasingly pricing in an escalating trade conflict.”

Trump’s advisers are crafting so-called “reciprocal” tariffs on trading partners worldwide that could take effect as soon as April 2. He’s also promised duties on automobiles, semiconductors, pharmaceuticals, lumber, and agricultural products.

Many U.S. manufacturers have championed Trump’s tariffs on steel and aluminum, arguing that subsidized foreign rivals—especially those in China, which produces more than it can consume at home—have unfairly set out to dominate the industry, robbing market share and jobs from U.S. suppliers. They argue the metal industry is critical to the U.S. industrial base and national security.

“Strengthening the steel and aluminum tariffs” will help incentivize “companies to boost output, make new investments, and hire workers,” said Scott Paul, president of the Alliance for American Manufacturing, whose members are U.S. steelmakers and workers. “Including derivative steel products makes a lot of sense to ensure that importers can’t game the system and that American companies which make these products have a level playing field.”

The nation’s largest steelmakers, including Nucor Corp., United States Steel Corp., Cleveland-Cliffs Inc., and Steel Dynamics Inc, last week urged Trump to “resist” calls for carve-outs, warning that previous exemptions prompted a surge of imports, causing prices to drop and their profits to shrink. Before the exemptions, Trump’s 2018 tariffs helped boost prices—and reduce imports—of both steel and aluminum.

The U.S. steel industry is coming off its worst year since Trump’s first term, as lackluster construction demand, inflation on input materials, and high borrowing costs crushed their earnings. While imports rose in 2024, they remained lower than 2022 and 2021. Steel inventories are near a multiyear high, sitting in warehouses awaiting an increase in demand.

The tariffs present a more complex challenge for the aluminum industry. Unlike American steelmakers, aluminum producers have a greater global footprint. More than half of the metal consumed in the United States is made in Canada, where the biggest producers are Rio Tinto Group and Pittsburgh-based Alcoa.

Alcoa CEO William Oplinger, Rio Tinto representatives, the president of the U.S. Aluminum Association, and others have recently been directly involved in lobbying the Trump administration to avoid the added tariffs on Canadian imports, according to people familiar with the discussions who asked not to be named because they were private.

Oplinger predicts devastating consequences from a 25 percent tariff, including the loss of about 20,000 direct U.S. aluminum industry jobs and another 80,000 indirect jobs.

Economists predict the tariffs are likely to drive up costs for some domestic industries that are heavily reliant on foreign supplies of specialty steel. That includes the oil industry, which uses steel pipes and other materials at wells. Higher costs for steel and aluminum also could trickle down to consumers in the form of more expensive automobiles, appliances, and even canned drinks.

Supporters of the president’s plan argue the tariffs ultimately will help drive more manufacturing to the United States. And while even the president has acknowledged there may be some short-term economic pain from his broader tariff onslaught for U.S. consumers, administration officials say extended tax cuts and more domestic energy production should help offset those costs.

While many countries affected by the fresh tariffs didn’t retaliate, they also weren’t happy about the moves. Australian Prime Minister Anthony Albanese told reporters that the Trump administration’s actions were “entirely unjustified” and an act of “economic self-harm.” “This is against the spirit of our two nations’ enduring friendship,” Albanese said. “And fundamentally at odds with the benefits that our economic partnership has delivered over more than 70 years.”

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