US President Donald Trump stated in a new executive order on Tuesday that he would raise the tariff rates on steel and aluminum products from 25% to 50% to support the US steel industry.
However, this policy, which is essentially arbitrary, has sparked significant discontent in both North America and Europe. According to data, most of the steel imported by the US comes from its two neighboring countries, Canada and Mexico, which are also the two countries that have been the most vocal in criticizing Trump's new policy.
In a media statement, the office of Canadian Prime Minister Justin Trudeau stated that the Trump administration's move to raise steel tariff rates is both illegal and unreasonable. The Canadian government is engaging in intensive negotiations with the US to eliminate the tariffs.
Mexican Minister of Economy Marcelo Ebrard publicly criticized at an event that Trump's tariffs are unfair and unsustainable, and that Mexico imports more steel from the US. He is committed to seeking tariff exemptions for Mexico.
Officials from the European Commission revealed that the Commission is in the final stages of consultations on expanding countermeasures. If no agreement can be reached with the US, existing and additional retaliatory measures by the EU will automatically take effect on July 14 or earlier.
Huge Losses
Data shows that over 90% of Canada's steel and aluminum exports go to the US. In a statement, the Canadian aluminum industry warned that the additional tariffs have made Canadian exports to the US economically unviable. The Canadian steel industry, on the other hand, stated that the country will face catastrophic unemployment, production slowdowns, and supply chain disruptions.
The German Steel Producers' Association, WV Stahl, also warned that Trump's announcement of imposing tariffs on US steel imports marks an escalation of transatlantic trade conflicts to a new level.
Kerstin-Maria Rippel, the director of the association, pointed out that the European Commission must find a balance between strict trade protection and reasonable negotiations. The European steel industry needs an effective trade protection tool in the near term; secondly, it is also crucial to continue negotiations with the US on a bilateral steel agreement.
European Commission spokesperson Maroš Šefčovič told the media that the European Commission has consistently made it clear that it is willing to take action to defend the EU's interests. The EU's top priority is to create space for negotiations, with lowering tariffs as its long-term goal.
Currently, the EU is facing 25% import tariffs on US steel and automobiles, as well as 20% reciprocal tariffs covering most EU goods, and a 10% across-the-board tariff. In response, the EU has imposed countermeasures on US goods worth 21 billion euros and is planning to impose additional tariffs on goods worth 95 billion euros.
