New tariffs imposed by US President Donald Trump on steel and aluminium imports have officially taken effect, sparking tensions with key American trade partners.
The measures, which impose a flat 25% duty on both metals, eliminate all previous country exemptions and have drawn immediate backlash from allies, including Canada, the European Union, and Australia.
While the Trump administration argues the tariffs will boost domestic steel and aluminium production, critics warn they will drive up prices for US consumers and industries reliant on imported metals, including aerospace, automotive, and construction.
The American Iron and Steel Institute (AISI), which represents US steel producers, welcomed the move, calling it a long-overdue step to combat unfair trade practices.
“AISI applauds the president’s actions to restore the integrity of the tariffs on steel and implement a robust and reinvigorated program,” said Kevin Dempsey, the group’s president.
However, downstream industries reliant on steel and aluminium are raising concerns. Michael DiMarino, who runs Linda Tool, a Brooklyn-based aerospace parts manufacturer, warned that the tariffs will ultimately raise costs for consumers.
“If I have higher prices, I pass them onto my customers. They have higher prices, they pass it onto the consumer,” he explained.
The American Automotive Policy Council, which represents major carmakers like Ford, General Motors, and Stellantis, also voiced concerns.
“Revoking exemptions for Canada and Mexico will add significant costs for our suppliers,” said Matt Blunt, the group’s president.
The tariffs have prompted swift reactions from major US trading partners. Canada, which exports more steel and aluminium to the US than any other country, has vowed to retaliate.
Jonathan Wilkinson, Canada’s Energy Minister, told CNN that while Canada would respond, it was not seeking to escalate tensions.
Australia, another long-time US ally, condemned the move but ruled out imposing reciprocal tariffs.
“This decision is entirely unjustified. It goes against the spirit of our nations’ enduring friendship,” said Australian Prime Minister Anthony Albanese.
The European Union has also signaled that it will take countermeasures, though details remain unclear.
Fears of economic fallout from the tariffs have triggered sharp declines in global stock markets. The S&P 500 fell another 0.7% on Tuesday after a steep 2.7% drop the day before—its biggest one-day decline since December. In Europe, the UK’s FTSE 100, France’s CAC 40, and Germany’s DAX all closed significantly lower.
Economic research firm Oxford Economics revised its US growth forecast for the year from 2.4% to 2%, citing tariff uncertainty and global trade disruptions.
“Uncertainty around the path for US tariffs is higher than ever,” the firm stated.
In a surprise move, Trump announced he was halting a plan to double tariffs on Canadian steel and metal imports to 50%, just hours after first threatening the measure. The decision came after Ontario suspended a planned 25% electricity surcharge on northern US states.
However, Canada remains subject to the newly implemented 25% tariff, ensuring tensions between the two close trading partners will persist.
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