Trump's Steel and Aluminium Tariffs Take Effect; EU, Canada Retaliate

US President Donald Trump's tariffs on the importation of steel and aluminium from all nations came into effect officially on Wednesday morning, with the European Union and Canada taking immediate action to retaliate.

Reverting to imposing tariffs from his initial term, Trump slapped a 25% tariff on steel and raised the aluminium tariff from 15% to 25%. But in contrast to his initial move, no country has been exempted this time.

Earlier this month, the ex-president also increased tariffs on Chinese, Mexican, and Canadian imports. The increases were to be used as a measure against problems like illegal immigration across the US-Mexico border (excluding China) and fentanyl smuggling, which is a highly addictive opioid. Another series of tariff boosts is imminent in April according to Trump's policy of reciprocal taxation.

The European Union has retaliated by imposing tariffs on $28 billion worth of US imports—an amount approximately the same value as the EU's steel and aluminium exports that are subject to Trump's tariffs. The EU's retaliatory measures will be phased in two stages. The first stage involves reinstating duties that were initially imposed in retaliation for Trump's tariffs during his first term, but which were suspended during President Joe Biden's presidency. That suspension expires in April, along with new tariffs on items like motorcycles, bourbon, and boats. The second phase of the EU's retaliation is due to begin two weeks later.

In the meantime, European Commission President Ursula von der Leyen has confirmed that she had ordered officials to resume trade talks with the US. "We firmly believe that in a world plagued by geo-economic and political uncertainties, it is not in our common interest to burden our economies with such tariffs," she said.

Canada, the biggest steel and aluminum supplier to the US, is to implement 29.8 billion Canadian-dollar retaliatory tariffs beginning Wednesday.

Although the White House hasn't made an announcement on the EU's counterattack, Trump himself has threatened previously that he will raise tariffs again if trade partners retaliate.