President Donald Trump’s increased tariffs on all U.S. steel and aluminum imports took effect on Wednesday, stepping up a campaign to reorder global trade in favour of the U.S.
The new law has also drawn swift retaliation from Europe.
Trump’s action to bulk up protections for American steel and aluminum producers restores effective global tariffs of 25 per cent on all imports of the metals and extends the duties to hundreds of downstream products made from the metals, from nuts and bolts to bulldozer blades and soda cans.
Trump’s hyper-focus on tariffs since taking office in January has rattled investor, consumer and business confidence in ways that economists worry could cause a U.S. recession and further lag on the global economy.
The European Commission, the executive arm of the European Union charged with coordinating trade matters, responded swiftly, saying it would impose counter tariffs on up to 26 billion euros ($28 billion) worth of U.S. goods often with more symbolic than economic impact from next month.
The Commission President, Ursula von der Leyen told reporters “we are ready to engage in meaningful dialogue,’’ adding she had tasked Trade Commissioner Maros Sefcovic to resume his talks with the U.S.
“We firmly believe that in a world fraught with geoeconomic and political uncertainties, it is not in our common interest to burden our economies with such tariffs,’’ she said.
China’s foreign ministry said Beijing would take all necessary measures to safeguard its rights and interests, while Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said the move could have a major impact on U.S.-Japan economic ties.
Close U.S. allies Canada, Britain and Australia criticised the blanket tariffs, with Canada mulling reciprocal actions and Britain’s trade minister Jonathan Reynolds saying “all options were on the table” to respond in the national interest.
Australian Prime Minister Anthony Albanese said the move was “against the spirit of our two nations’ enduring friendship” but ruled out tit-for-tat duties.
The countries most affected by the tariffs are Canada, the biggest foreign supplier of steel and aluminum to the U.S., Brazil, Mexico and South Korea, which all have enjoyed some level of exemptions or quotas.
The 27 countries of the EU are less impacted, for now.
Germany’s Kiel Institute estimated a hit to EU output of only 0.02%, because “only a small fraction” of the targeted products is exported to the U.S. (Reuters/NAN)
