Former US President Donald Trump raised trade tensions on Wednesday, threatening further tariffs on European Union (EU) products in retaliation against the bloc’s proposal to impose countermeasures on US goods.
Speaking at the White House just hours after his administration’s 25% tariffs on steel and aluminum imports took effect, Trump warned that if the EU followed through with its retaliatory tariffs next month, the US would respond in kind. “Whatever they charge us, we’re charging them,” he declared.
The action has alarmed investors and businesses, with fears that Trump’s belligerent tariff actions will push the economy into recession. A Reuters/Ipsos survey reported that 57% of Americans perceive his trade moves as unpredictable, and 70% fear higher tariffs will raise consumer prices.
Canada, the largest foreign source of steel and aluminum to the United States, threatened retaliatory 25% tariffs on those metals, as well as on American exports of computers, sporting goods, and other items worth $20 billion. Canadian Finance Minister Dominic LeBlanc declared that his nation would not stand idly by as its industries got hurt. Further, Canada’s central bank reduced interest rates to mitigate the economic blow.
At the same time, Trump’s tariffs will be felt downstream of raw materials, touching products like nuts, bolts, bulldozer blades, and soda cans. US Commerce Secretary Howard Lutnick also indicated possible trade restrictions on copper.
In spite of its strong stand, the EU has limited exposure since only a small percentage of its exports to the US are targeted. But its retaliatory measures, to come into force next month, would target $28 billion worth of US products, including bourbon, diamonds, bathrobes, and dental floss.
European Union Commission President Ursula von der Leyen acknowledged the conflict but stressed the importance of dialogue, saying, “It is not in our common interest to burden our economies with such tariffs.”
Outside the EU, China and Japan complained, with Beijing promising to protect its interests and Tokyo threatening possible economic backlash. Close US allies Britain and Australia condemned Trump’s tariffs but held off retaliating.
As tensions rise in trade, Trump’s policies continue to rock global markets, with uncertainty hanging over future talks.
