Trump's steel tariffs trigger global trade tensions and european retaliation

2025-03-12 general

Washington, Wednesday, 12 March 2025.
The U.S. government has imposed a 25% tariff on steel and aluminum imports. Europe is retaliating with tariffs on $28.33 billion worth of U.S. goods. This action is expected to increase prices in a multi-trillion yen market. Major U.S. automakers could see a 4% decrease in operating profits. Trump had considered raising tariffs on Canadian metals to 50%. Ontario temporarily suspended a 25% tax on electricity exports to the U.S. The EU had a trade surplus of 155.8 billion euros with the U.S. in 2023.

Tariffs impact global markets

The new tariffs, effective today, impact a global market valued at approximately ¥22 trillion [3]. These tariffs are projected to exert upward pressure on prices, potentially fueling inflation [3]. Ursula von der Leyen, European Commission President, stated tariffs are taxes that negatively affect businesses and consumers [1]. She added that tariffs disrupt supply chains and create economic uncertainty [1]. These trade actions could influence investment decisions across multiple sectors, including semiconductors [GPT].

EU responds with countermeasures

The European Union plans to impose counter-tariffs on U.S. goods valued at 26 billion euros ($28.33 billion), beginning in April [1][2]. This retaliatory action follows the U.S. decision to implement a 25% tariff on steel and aluminum imports from various countries, including EU members [1][2]. The EU’s strategy involves re-imposing previously suspended tariffs on 8 billion euros of U.S. exports [2]. New countermeasures will also be applied to an additional 18 billion euros worth of goods [2]. The European Commission remains open to negotiations despite the countermeasures [2].

Canadian response and market volatility

Initially, Trump considered increasing tariffs on Canadian steel and aluminum to 50% in response to Ontario’s 25% tax on electricity exports to the U.S [2][4]. However, this plan was later retracted after Ontario agreed to suspend the surcharge [4][5]. The back-and-forth announcements led to significant market volatility [6]. During the period, the Canadian stock index approached 24360 points [6]. Algoma Steel’s stock decreased by 3% on the Toronto Stock Exchange [6].

Stock reactions vary by company

The tariffs have triggered diverse reactions in the stock market [6]. U.S. Steel (X) saw an increase of over 4.8% [6]. U.S. Aluminum (AA) increased to 2.6% [6]. Century Aluminum (CENX) experienced a substantial rise of 8.4% [6]. Nucor Steel increased 2.6% [6]. Steel Dynamics increased 2% [6]. Kaiser Aluminum increased 1.8% [6]. An analyst at Global Markets noted that the tariffs have created uncertainty, prompting strong investor reactions [6].

Expert opinions on trade actions

Australian Prime Minister Anthony Albanese described Trump’s metal tariffs as ‘entirely unjustified’ [2]. Albanese stated the tariffs contradict the spirit of the enduring friendship between the two nations [2]. He added that they undermine the economic partnership’s benefits over the past 70 years [2]. Former U.S. Treasury Secretary Summers called the tariffs on Canadian steel and aluminum the worst trade policy to date [6]. These tariffs may impact investment decisions and overall economic stability [1][6].

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Steel tariffs Trade war