U.S. tariffs on steel, aluminum spark strong backlash across the world

Mexico, Canada and the European Union on Tuesday condemned U.S. President Donald Trump's decision to impose tariffs on all steel and aluminum imports from next month, a move that has fanned fears of a trade war as business and political leaders braced for yet more trade duty announcements from the new administration.

Businesses around the United States also warned of fallout from the tariffs, with many manufacturing-heavy companies finding it difficult to plan next steps or determine if Trump will follow through. The tariff hike would reverberate across the supply chain, affecting all businesses that rely on the materials, they said.

Trump signed proclamations late on Monday raising the U.S. tariff rate on aluminum to 25 percent from the previous 10 percent rate and eliminating country exceptions and quota deals as well as hundreds of thousands of product-specific tariff exclusions for both metals.

The measures, due to take effect on March 12, will apply to millions of tons of steel and aluminum imports from Canada, Brazil, Mexico, South Korea and other countries that had been entering the U.S. duty free under the carve-outs.

Mexican Economy Minister Marcelo Ebrard called the tariff decision "not justified" and "unfair." He did not say if Mexico planned reciprocal tariffs on steel or aluminum it imports from the United States.

Canadian Prime Minister Justin Trudeau said the tariffs were "unacceptable." Canada's response, if needed, would be firm and clear, he said at an artificial intelligence summit in Paris.

European Commission President Ursula von der Leyen joined the condemnation, saying the 27-nation bloc would take "firm and proportionate countermeasures." U.S. Vice President JD Vance said he would discuss trade and economic issues with von der Leyen at the AI summit in Paris on Tuesday.

The move will simplify tariffs on the metals, Trump told reporters. "It's 25 percent without exceptions or exemptions," he said. "That's all countries, no matter where it comes from, all countries."

The biggest impact will be on aluminium, used in transport, construction and packaging, with net imports accounting for around 82 percent of U.S. requirements, according to Morgan Stanley.

The U.S. aluminium premium over the global benchmark on the London Metal Exchange has shot up by a quarter since Friday to 35 cents per pound and has surged by 60 percent since Trump was elected.

"Aluminium capacities would have to be massively expanded in a short period of time to replace even a portion of the imports with domestic production," said analyst Volkmar Baur at Commerzbank.

Trump said on Monday he would announce reciprocal tariffs over the next two days on all countries that impose duties on U.S. goods, and said he was also looking at tariffs on cars, semiconductors and pharmaceuticals.

Asked about threats of retaliation by other countries against his new tariffs, Trump said, "I don't mind." No updated guidance on timing for those had been provided by the White House by Tuesday afternoon.

Ready to retaliate 

Von der Leyen warned on Tuesday that U.S. tariffs on steel and aluminum imports from the EU will trigger countermeasures. "Unjustified tariffs on the EU will not go unanswered," von der Leyen said in a statement. "The EU will act to safeguard its economic interests. We will protect our workers, businesses and consumers."

Addressing members of the European Parliament in Strasbourg on Tuesday, European Commissioner for Trade and Economic Security Maros Sefcovic said that the EU will respond "firmly and proportionately" to the tariffs imposed by the U.S.

"In our opinion the tariffs are unjustified, because they will lead to an increase in prices and inflation," Sefcovic said. Describing the move as a "lose-lose scenario," he warned that the tariffs were "economically counterproductive."

German Chancellor Olaf Scholz reaffirmed EU's stance on countermeasures. "If the U.S. leaves us no other choice, the EU will respond with a united position," he said in a speech to the Bundestag on Tuesday.

The American Chamber of Commerce to the EU, representing U.S. companies active in Europe, also criticized the move as harmful to jobs, prosperity and security on both sides of the Atlantic.

"The damage will extend beyond just the steel and aluminum sectors, impacting all businesses that rely on these materials throughout the supply chain," it said in a statement.

Cost and chaos

Executives across industries reliant on steel and aluminum imports were scrambling to offset the cost of Trump's move after previous tariff threats from the White House that were later scrapped.

Companies ranging from Coca-Cola and Ford to smaller aluminum, aerospace and appliance firms expect to be affected by Trump's moves, which Ford CEO Jim Farley said have so far added "a lot of cost and a lot of chaos" to American business.

The Coalition of American Metal Manufacturers and Users (CAMMU) said failure to include a workable exclusion process would hurt U.S. manufacturers, and especially small- and medium-sized businesses that were left paying significantly more for inputs to their production.

"Foreign customers are shifting their supply chains away from U.S. producers. Once removed, especially for smaller, family-owned businesses, it is difficult to regain that lost business," the group said.

It said the threat of retaliatory tariffs from key trading partners further threatened U.S. exports and manufacturing jobs, stalling expansion plans and teeing up difficult choices on investments, retention and long-term growth.

Steel imports accounted for about 23 percent of American steel consumption in 2023, according to American Iron and Steel Institute data, with Canada, Brazil and Mexico being the largest suppliers.

Canada accounted for nearly 80 percent of U.S. primary aluminum imports in 2024.

(With input from agencies)