Trump Threatens New Tariffs as Global Trade Tensions Rise

President Trump escalates trade tensions by promising additional tariffs after the EU and Canada retaliate against his latest import taxes on steel and aluminum, raising concerns over economic impacts worldwide.

In a dramatic escalation of trade tensions, US President Donald Trump has announced plans to impose additional tariffs following retaliatory actions from the European Union (EU) and Canada against his recent import taxes on steel and aluminium. Trump stated, "of course" he would respond to these countermeasures, reiterating his intent to establish "reciprocal" tariffs next month, emphasizing, "Whatever they charge us with, we're charging them." This announcement further deepens a trade conflict that has already sent shockwaves through financial markets and raised alarm over potential economic ramifications for consumers and economies globally.

On Wednesday, Trump expanded US tariffs on steel and aluminium with a blanket duty of 25%, removing previous exemptions for certain countries. This move came on the heels of an earlier order that boosted tariffs on Chinese imports to a minimum of 20%. Additionally, Trump has suggested tariffs on various specific goods, including copper, lumber, and automobiles. In response, leaders in Canada and Europe branded the new metal tariffs as unjustified, promptly retaliating with their own tariffs on an array of American products. Countries such as the UK, Australia, Mexico, and Brazil have so far refrained from immediate retaliation. UK Prime Minister Sir Keir Starmer expressed disappointment but insisted on a pragmatic approach, noting ongoing negotiations for a comprehensive trade deal that considers tariffs.

Beginning Thursday, Canada will impose a 25% tariff on approximately C$30 billion ($20 billion; £16 billion) worth of US goods, including key products like steel and electronics. Prime Minister-designate Mark Carney hinted at the possibility of negotiating a new trade agreement with Trump, provided Canadian sovereignty is respected. The EU has declared plans to raise tariffs on about €26 billion ($28 billion; £22 billion) worth of US goods, with EU President Ursula von der Leyen warning that higher prices and job risks are inherent with such tariffs.

Meanwhile, major US food manufacturers, including Quaker Oats and Folgers coffee, have sought targeted exemptions from the imposed tariffs on essential imports. Reports indicate that companies like PepsiCo and J M Smucker are urging the administration to consider exemptions for ingredients not available in the domestic market. Critics warn that Trump's tariffs are likely to inflate prices for US consumers and stifle economic growth in the short term, with significant impacts felt in the global metals market as well.

As stock markets reacted, US shares experienced a mixed outcome following a brief period of significant decline. During a White House meeting with Irish Prime Minister, Taoiseach Micheál Martin, Trump maintained his hardline stance against EU trade practices, citing punitive penalties imposed on major corporations and claiming that the EU's regulations disadvantage US exports. He declared, "We're going to win that financial battle," reinforcing his commitment to the escalating trade fight.