US President Donald Trump has escalated his international trade war with fresh tariffs on steel and aluminum imports. The 25% tariffs took effect on Wednesday (March 12) without exceptions, prompting retaliation from major trading partners.
Tariffs on Canada & Mexico – March 4 (Partially Delayed to April 2)
Trump imposed 25% tariffs on Canadian and Mexican imports on March 4, referencing illegal immigration and fentanyl concerns. He also implemented a 10% tariff on Chinese imports since fentanyl tends to come from China.
Though he signed the orders shortly after his inauguration, Canada and Mexico had initially obtained a one-month reprieve. When the waivers lapsed, tariffs were imposed on March 4. Trump suspended some of the tariffs on Canada and Mexico on March 5, specifically on automobiles. On the following day, he broadened the suspension to US-Mexico-Canada Agreement (USMCA) goods. Reports, however, said that only 38% of Canadian and 50% of Mexican imports were exempted.
Tariffs on China – February 4 & March 4
China imposed a 10% tariff on February 4, a second 10% tariff on March 4. China retaliated with a 15% tariff on US LNG and coal, and a 10% tariff on vehicles, machinery, and crude oil. China raised tariffs to 15% on US agricultural products and 10% on soybeans, seafood, dairy, and pork on March 10. China also banned 25 US companies from exports and investments.
Steel & Aluminum Tariffs – March 12
The 25% tariffs on steel and aluminum imports from March 12 are likely to affect Canada the most. The tariffs are over and above the already imposed 25% Canada-specific tariffs. Trump first sought to raise them to 50% for Canada before withdrawing the plan.
Reciprocal Tariffs – April 2 Onward
Beginning April 2, the US intends to impose tariffs on American goods equivalent to those imposed by other nations. Commerce Secretary Howard Lutnick will provide a report on international tariffs on April 1, from which point Trump can begin imposing tariffs on individual countries. Negotiations with trade partners would intervene before implementation.
Future Tariffs on EU & Copper
Trump has announced plans to impose 25% tariffs on EU imports, particularly targeting automobiles. “We have made a decision. We’ll be announcing it very soon, and it’ll be 25 per cent generally speaking, and that’ll be on cars and all of the things,” he said.
Additionally, he has ordered an investigation into copper imports, which could lead to further tariffs. The timeline remains unclear.
Market Reactions & Economic Concerns
Trump‘s tariffs have created market uncertainty, with the stocks plummeting over the weekend. Fears of inflation and recession hang over the horizon as increased import costs affect manufacturers and consumers. Inconsistent tariff policies by the administration have also caused confidence in the US government to decline.
While Trump keeps imposing new tariffs, global trade tensions are high as nations consider their response strategies.
