Canada says the additional tariffs are a response to President Trump’s 25% levy on aluminum and steel imports. Canada, Mexico, Brazil and South Korea are among the nations most badly affected by the US move.
Canadian Finance Minister Dominic LeBlanc on Wednesday announced retaliatory tariffs on 29.8 billion Canadian dollars ($20.7 billion, €19 billion) of US goods after US President Donald Trump imposed a 25% levy on steel and aluminum imports.
Canada is the biggest foreign supplier of steel and aluminum to the US.
The 25% tariffs are to go into effect on Thursday morning, LeBlanc said, adding that they would affect products such as computers, sports equipment, and cast iron products.
LeBlanc called the US tariffs “unjustified and unreasonable.”
Escalating trade wars
Trump’s increased tariffs on all steel and aluminum imports came into effect on Wednesday as the United States widened its scope of levies amid a campaign to reorder trade norms in its favor.
The 25% duties on the two metals would likely push up the cost of producing items ranging from drink cans, home appliances to automobiles, leaving a looming threat of a rise in consumer prices in due course.
Also on Wednesday, the European Union announced “countermeasures” against some US goods in a tit-for-tat move against the steel and aluminum tariffs.
Trump backtracks on threat to Canada
Ahead of the tariff deadline on Tuesday, Trump threatened Canada with doubling the duty to 50% on steel and aluminum exports to the US.
The president later chose to stick to the 25% rate after the Canadian province of Ontario suspended a decision to put a surcharge on electricity sold to the American states of Michigan, Minnesota and New York.
The electricity surcharge was a retaliation to earlier US levies.
Ontario Premier Doug Ford said he would visit Washington on Thursday with Canadian Finance Minister LeBlanc for discussions with Trump officials, including Commerce Secretary Howard Lutnick, on revising the United States–Mexico–Canada Agreement (USMCA) on trade.
The USMCA was signed during Trump’s first term in office and replaced the previous NAFTA agreement.
The new levies imposed Wednesday will stack on top of earlier ones, meaning that some steel and aluminum products from Canada and Mexico will likely see a 50% tariff rate unless they are compliant with the USMCA.
Brazil and Mexico are important US suppliers of steel, while the United Arab Emirates and South Korea are among key providers of aluminum.
Mexico’s president, Claudia Sheinbaum, said her government would wait for a possible resolution in the next few weeks instead of responding immediately with retaliatory tariffs. American steel producers hail move
US steel producers welcomed the restoration Wednesday of Trump’s prior metals tariffs, which were introduced in 2018 but later largely eroded by exemptions.
Back then, Canada and Mexico avoided the import duties on the metals after they agreed to Trump’s demand for a revamped North American trade deal in 2020.
Other trading partners of the US had import quotas supplant the tariffs. There were also thousands of product-specific exclusions.
“By closing loopholes in the tariff that have been exploited for years, President Trump will again supercharge a steel industry that stands ready to rebuild America,” Philip Bell, the president of Steel Manufacturers Association, said.
“The revised tariff will ensure that steelmakers in America can continue to create new high-paying jobs and make greater investments knowing that they will not be undercut by unfair trade practices,” he added.
Wall Street indexes fell for a second straight day on Tuesday as Trump’s volatile trade plans have triggered concerns that they could steer the world’s biggest economy toward a recession.
The US president dismissed the losses on Wall Street, saying that he does not see the possibility of an economic downturn.
