Egypt Daily News – China and European Union countries pledged on Wednesday to respond and defend their economic interests against new wide-ranging U.S. tariffs targeting steel and aluminum imports, bringing Washington closer to an open trade war with two major trading partners.
New U.S. tariffs on steel and aluminum imports took effect just after midnight (04:01 GMT) “without exceptions or exemptions,” according to the White House, despite efforts by several countries to avoid them.
The European Commission announced that it would impose a “series of countermeasures” starting April 1 in response to what it called the “unjustified trade restrictions” by the United States.
Commission President Ursula von der Leyen expressed the EU’s “deep regret” over the tariffs, stating that the bloc’s response would be “strong but proportionate.” She added, “While the U.S. imposes $28 billion in tariffs, we are responding with measures of an equivalent value in euros.”
China’s Response
China, the world’s largest steel producer, though not a major exporter of steel to the U.S., vowed to take “all necessary measures” in response.
Foreign Ministry spokesperson Mao Ning warned that “no party wins in trade wars,” adding that the U.S. tariffs “seriously harm the multilateral, rules-based trading system.”
Economic Impact
President Donald Trump’s 25% tariffs on steel and aluminum will raise production costs for various goods, from home appliances to automobiles and beverage cans. Experts warn this could ultimately lead to higher consumer prices.
Clark Packard from the Cato Institute told AFP, “I wouldn’t be surprised to see these tariffs quickly reflected in prices.” He noted that the U.S. auto and construction industries are among the largest steel consumers.
Trade Disruptions and Global Reactions
Since returning to office, Trump has imposed high tariffs on key U.S. trading partners, including Canada, Mexico, and China. While he later eased restrictions on Canada and Mexico, he has now vowed to introduce new tariffs starting April 2.
Canada, which supplies about 50% of U.S. aluminum imports and 20% of its steel imports, will be particularly affected. Other major suppliers include Brazil and Mexico for steel, while the UAE and South Korea provide aluminum.
The latest tariffs add to existing ones, meaning some Canadian and Mexican steel and aluminum products could face duties as high as 50% unless they comply with the United States-Mexico-Canada Agreement (USMCA).
Market uncertainty surrounding Trump’s trade policies has already rattled financial markets, with Wall Street indices declining for the second consecutive day on Tuesday. Asian markets followed suit on Wednesday, with stocks in Hong Kong and Shanghai falling.
Uncertainty and Global Trade Concerns
Washington claims the tariffs aim to protect the U.S. steel industry and workers amid growing foreign competition, particularly from Asia. However, this is not the first time Trump has imposed such measures.
During his first term, he introduced tariffs on steel and aluminum in 2018, prompting the EU to prepare retaliatory tariffs, which were frozen until March 31. As part of its response strategy, the EU may reintroduce those tariffs unless Trump reverses his latest decision.
By mid-April, the EU’s countermeasures will be fully implemented unless the U.S. backs down.
Even before the tariffs took effect, manufacturers began seeking cost-effective domestic sources. Packard noted that merely threatening protectionist measures had already driven U.S. steel and aluminum companies to raise prices, creating “huge uncertainty.”
While some U.S. steel manufacturers view the tariffs as beneficial, others warn they will increase import costs, driving up prices for American-made products as well.
Gregory Daco, chief economist at Ernst & Young, pointed out that the new tariffs go beyond those imposed in 2018, covering finished goods in addition to raw steel and aluminum. He warned that “this makes sourcing from abroad significantly more expensive across several industries.”
Failed Negotiations and Discontent from Allies
Despite visits from officials representing U.S. allies such as Australia and Japan in recent days to seek exemptions, Washington announced Wednesday that no exceptions would be granted.
Japan’s government spokesperson Yoshimasa Hayashi called the failure to secure exemptions “regrettable.”
Australian Prime Minister Anthony Albanese described the tariffs as “completely unjustified” but confirmed that Australia would not take retaliatory action.
The UK government labeled the new U.S. tariffs “disappointing,” but refrained from retaliating, as it continues negotiations for a broader trade agreement with Washington.
