Trump’s steel, aluminium tariffs: How are targeted countries responding?

President Trump’s Tariffs Spark Global Trade Tensions

President Donald Trump’s decision to impose tariffs on steel and aluminum imports has sent shockwaves through global markets, escalating trade tensions with key partners like Canada, Mexico, and the European Union. The tariffs, set at 25% for steel and aluminum, have triggered a mix of retaliatory measures, exemption requests, and frantic negotiations. As the situation unfolds, it is becoming clear that not all countries are responding in the same way. While some, like Canada and the EU, are hitting back with their own tariffs, others, such as Brazil and South Korea, are opting for diplomacy. Meanwhile, China, though not a major supplier of steel and aluminum to the U.S., has vowed to defend its interests. At the heart of this trade war lies a crucial question: what does this mean for industries that rely on these metals, and how will the global economy be affected?

The Suppliers: Who Depend on the U.S. Market?

The U.S. relies heavily on imports for both steel and aluminum, with its top suppliers playing a critical role in the global supply chain. For steel, Canada, Brazil, and Mexico are the leading exporters to the U.S., accounting for nearly 49% of imports between March 2024 and January 2025. Canada alone supplies 16% of U.S. steel imports, followed by Brazil at 14% and Mexico at 9%. Other significant suppliers include South Korea, Vietnam, Japan, Germany, Taiwan, the Netherlands, and China, which together make up 30% of U.S. steel imports. For aluminum, the picture is slightly different. Canada dominates, providing nearly 40% of U.S. aluminum imports, followed by the United Arab Emirates, Russia, and Mexico.

The Ripple Effect: Industries and Consumers Feel the Heat

The impact of these tariffs is far-reaching, affecting not just global trade but also the everyday lives of consumers. Steel and aluminum are essential materials used in a wide range of products, from home appliances and cars to airplanes and smartphones. Steel, in particular, is a cornerstone of construction, manufacturing, transportation, and energy, with the construction sector alone accounting for one-third of all steel imports. The tariffs are expected to drive up costs for infrastructure projects, such as airports, schools, and roads. Aluminum, known for its lightweight and corrosion-resistant properties, is vital for the automotive and aerospace industries, as well as food and beverage packaging. The U.S. is especially vulnerable when it comes to aluminum, with about half of its supply coming from foreign sources.

Last year, the U.S. imported $31 billion worth of steel and $27 billion worth of aluminum, according to data from the U.S. Department of Commerce. These imports are not just vital for U.S. industries; they also underscore the interconnected nature of global trade. Vina Nadjibulla, vice president of research and strategy at the Asia Pacific Foundation of Canada, has criticized the tariffs, arguing that they lack a clear economic or national security rationale. “The U.S. can’t realistically onshore enough of these commodities, so the duties mainly create economic pain for American consumers and key trading partners,” she said. Nadjibulla also warned that the tariffs introduce a level of “unpredictability and volatility we haven’t seen in decades,” undermining established trade norms and encouraging other nations to retaliate.

How Countries Are Responding

The response to the tariffs has varied widely, reflecting the diverse interests and strategies of U.S. trading partners. Canada, the largest supplier of both steel and aluminum to the U.S., has taken a strong stance against the tariffs. Prime Minister Justin Trudeau has called the tariffs “unjustifiable” and a “dumb thing to do.” In retaliation, Canada has imposed 25% tariffs on $20.6 billion worth of U.S. goods, including $8.8 billion on steel and $2 billion on aluminum. Additionally, Canada has introduced an extra tariff of nearly $10 billion on U.S. products such as computers, display monitors, water heaters, and sports equipment. Trudeau has made it clear that Canada will stand up for its workers and ensure that the U.S. understands the consequences of its actions.

The European Union has also announced retaliatory measures, targeting more than $28 billion worth of U.S. goods. These include motorcycles, peanut butter, jeans, and bourbon. The EU’s response will be rolled out in two phases. The first phase, which took effect on April 1, involves reinstating previously suspended tariffs on $8.7 billion worth of U.S. products, including steel, aluminum, bourbon, and motorcycles. These tariffs were initially imposed between 2018 and 2020 during Trump’s first term but were suspended under the Biden administration. The second phase, set to begin in mid-April, will introduce new tariffs on an additional $19.6 billion worth of U.S. exports, such as poultry, dairy products, fruits, and cereals. European Commission President Ursula von der Leyen has expressed regret over the tariffs, calling them “bad for business and even worse for consumers.” She emphasized that the EU remains open to negotiation but will not hesitate to defend its interests.

The Economic Pain: Industries and Consumers Bear the Brunt

The tariffs have already begun to inflict economic pain on both industries and consumers. As Vina Nadjibulla pointed out, the tariffs are not only damaging to U.S. trading partners but also harmful to American consumers. By driving up the cost of essential materials like steel and aluminum, the tariffs are likely to increase the price of everyday goods, from cars and home appliances to food and beverages. This price hike will disproportionately affect low-income families, who spend a larger share of their income on basic necessities.

Moreover, the tariffs are undermining the global trade system that has been in place for decades. By encouraging other nations to respond in kind, the U.S. is setting off a chain reaction that could have devastating consequences for the global economy. The unpredictability and volatility caused by the tariffs are already affecting investor and consumer confidence, leading to stock market fluctuations and a potential slowdown in global trade. As Nadjibulla noted, “When large economies engage in tit-for-tat tariff escalations, the risk of a global trade slowdown looms larger. These measures don’t just hurt the near-term bottom line – they threaten the entire framework of open trade that has underpinned much of the world’s economic growth and stability.”

The Broader Implications: U.S. Ties with Allies at Risk

The tariffs are also straining U.S. relations with its key allies. Countries like Canada, Australia, and South Korea, which have historically enjoyed strong trade relationships with the U.S., are now forced to reassess their partnerships. Australia, for example, has decided not to retaliate, with Prime Minister Anthony Albanese calling the tariffs “entirely unjustified.” However, Canberra has managed to secure an exemption from steel and aluminum tariffs under the USMCA trade agreement. Despite this, the broader message is clear: the U.S. is increasingly seen as an unpredictable and unreliable partner.

This perception is likely to have long-term consequences for U.S. alliances. As Nadjibulla observed, countries like Canada, Australia, and South Korea “will look to minimize their vulnerabilities” and diversify their trade partners. This shift could weaken the U.S. position on the global stage and open opportunities for other countries, such as China, to strengthen their trade relationships with U.S. allies. The tariffs are also setting a dangerous precedent, encouraging other nations to adopt protectionist policies that could further fragment the global economy.

Conclusion: A Trade War with No Winners

The tariff war sparked by President Trump’s policies is a lose-lose situation for all involved. While the tariffs may provide short-term protection for U.S. steel and aluminum industries, they are causing significant economic pain for American consumers and key trading partners. The retaliatory measures from Canada, the EU, and other countries are only exacerbating the situation, leading to higher prices, job losses, and a potential global trade slowdown.

Moreover, the tariffs are undermining the rules-based international trade system that has been in place for decades. By encouraging other nations to respond in kind, the U.S. is setting off a chain reaction that could have far-reaching consequences for global economic stability. The tariffs are also straining U.S. relations with its key allies, which could have long-term implications for its position as a global leader.

As the situation continues to unfold, it is becoming increasingly clear that there are no winners in a trade war. The tariffs are not only damaging to the U.S. economy but also threatening the global trade system that has underpinned much of the world’s economic growth and stability. The only way forward is through dialogue and negotiation, with all parties working together to find a solution that balances their interests and avoids further escalation.