WASHINGTON — President Donald Trump openly challenged U.S. allies on Wednesday by increasing tariffs on all steel and aluminum imports to 25% as he vowed to take back wealth "stolen" by other countries, drawing quick retaliation from Europe and Canada.
The Republican president's use of tariffs to extract concessions from other nations points toward a possibly destructive trade war and a stark change in America's approach to global leadership. It also destabilized the stock market and stoked anxiety about an economic downturn.
"The United States of America is going to take back a lot of what was stolen from it by other countries and, frankly, by incompetent U.S. leadership," Trump said Wednesday. "We're going to take back our wealth, and we're going to take back a lot of the companies that left."
Trump removed all exemptions from his 2018 tariffs on the metals, in addition to increasing the tariffs on aluminum from 10%. His moves, based off a February directive, are part of a broader effort to disrupt and transform global commerce.
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He has separate tariffs on Canada, Mexico and China, with plans to also tax imports from the European Union, Brazil and South Korea by charging "reciprocal" rates starting April 2.
European Commission president Ursula von der Leyen addresses European Parliament members Tuesday on new plans to ramp up defense spending at the European Parliament in Strasbourg, eastern France.
The EU announced its own countermeasures Wednesday. European Commission President Ursula von der Leyen said that as the United States was "applying tariffs worth 28 billion dollars, we are responding with countermeasures worth 26 billion euros," or about $28 billion.
Those measures, which cover not just steel and aluminum products but also textiles, home appliances and agricultural goods, are due to take effect April 1.
U.S. Trade Representative Jamieson Greer said the EU is punishing America instead of fixing what he viewed as excess capacity in steel and aluminum production.
"The EU's punitive action completely disregards the national security imperatives of the United States — and indeed international security — and is yet another indicator that the EU's trade and economic policies are out of step with reality," he said in a statement.
Meeting on Wednesday with Ireland's Taoiseach Micheál Martin, Trump said "of course" he wants to respond to EU's retaliations and "of course" Ireland is taking advantage of the United States.
Ireland's Prime Minister Michael Martin speaks Wednesday at the annual St. Patrick's Day luncheon at the Capitol in Washington.
Last year, the United States ran a $87 billion trade imbalance with Ireland. That's partially because of the tax structure created by Trump's 2017 overhaul, which incentivized U.S. pharmaceutical companies to record their sales abroad, Brad Setser, a senior fellow at the Council of Foreign Relations, said on social media.
Canada sees itself as locked in a trade war because of White House claims about fentanyl smuggling and that its natural resources and factories subtract from the U.S. economy instead of supporting it.
"This is going to be a day-to-day fight. This is now the second round of unjustified tariffs leveled against Canada," said Mélanie Joly, Canada's foreign affairs minister. "The latest excuse is national security despite the fact that Canada's steel and aluminum adds to America's security. All the while there is a threat of further and broader tariffs on April 2 still looming. The excuse for those tariffs shifts every day."
Canada is the largest foreign supplier of steel and aluminum to the United States and plans to impose retaliatory tariffs of $20.7 billion starting Thursday in response to the U.S. taxes on the metals.
Steel on coil cars are seen Feb. 4 at the main factory of a steel producer in Duisburg, Germany.
Canada's new tariffs would be on steel and aluminum products, as well as U.S. goods including computers, sports equipment and water heaters worth $9.9 billion. That's in addition to the 25% counter tariffs on $20.8 billion of imports from the U.S. that were put in place on March 4 in response to other Trump import taxes that he partially delayed by a month.
Trump told CEOs in the Business Roundtable a day earlier that the tariffs were causing companies to invest in U.S. factories. The 7.5% drop in the S&P 500 stock index over the past month on fears of deteriorating growth appears unlikely to dissuade him, as Trump argued that higher tariff rates would be more effective at bringing back factories.
"The higher it goes, the more likely it is they're going to build," Trump told the group. "The biggest win is if they move into our country and produce jobs. That's a bigger win than the tariffs themselves, but the tariffs are going to be throwing off a lot of money to this country."
President Donald Trump and House Speaker Mike Johnson, R-La., attend the annual St. Patrick's Day luncheon Wednesday at the Capitol in Washington.
Trump threatened Tuesday to put tariffs of 50% on steel and aluminum from Canada, but he chose to stay with the 25% rate after the province of Ontario suspended plans to put a surcharge on electricity sold to Michigan, Minnesota and New York.
Democratic lawmakers dismissed Trump's claims that his tariffs are about national security and drug smuggling, saying they're actually about generating revenues to help cover the cost of his planned income tax cuts for the wealthy.
"Donald Trump knows his policies could wreck the economy, but he's doing it anyway," said Senate Democratic Leader Chuck Schumer of New York. "Why are they doing all these crazy things that Americans don't like? One reason, and one reason alone: tax breaks for billionaires, the north star of the Republican party's goals."
Outside forecasts by the Budget Lab at Yale University, Tax Policy Center and others suggest that U.S. families would have the costs of the taxes passed onto them in the form of higher prices.
As tariffs loom and global currency values fluctuate, goods from these top US trade partners may shift in price
As tariffs loom and global currency values fluctuate, goods from these top US trade partners may shift in price
Since his reelection, President Trump has followed through on campaign promises to impose tariffs on America's biggest trading partners—Canada, China, and Mexico—in an attempt to further his terms on trade, borders, and drug trafficking crackdowns. But the tariff threats, reversals, deals, and reprisals are leaving consumers, businesses, and economists experiencing whiplash about what's going to happen next.
Tariffs are import taxes on foreign goods, but it's not foreign companies who pay them. When the United States slaps a tariff on Chinese steel, . Fees are collected by Customs and Border Protection agents at ports of entry, and into Treasury coffers. When tariffs rise, those companies face a choice:Â If they can't find domestic sources for necessary goods, they must eat the cost and watch their profits shrink, or pass the rising fee on to consumers through higher prices.
While the rationale behind Trump's approach to tariffs may be to increase revenue, balance trade, and assert dominance over rival countries, those outcomes are far from certain. Tariffs not only run the risk of raising prices, but in some cases, they also up the ante for U.S. exports by creating a game of brinkmanship. For example, when in early February, Beijing swiftly responded by targeting American energy with 15% tariffs on coal and natural gas, and 10% duties on crude oil and farm equipment.
Because China exports more to the U.S. than it imports, it is limited in its ability to match Trump's tariffs one for one. So this time China has added additional measures to strike back and cause other forms of financial and business hardship. China's Ministry of Commerce also launched an antitrust probe into Google and blacklisted two American firms—fashion powerhouse PVH Group, which owns global clothing brands Tommy Hilfiger and Calvin Klein, along with biotech firm Illumina. China also restricted exports of critical minerals like tungsten and tellurium, essential ingredients for everything from smartphones to electric vehicles.
Meanwhile, on Canada and Mexico after securing border security commitments. Canada pledged $1.3 billion Canadian dollars (or $915 million USD) for border investment and appointed a new so-called fentanyl czar, while Mexico agreed to deploy 10,000 National Guard troops along its northern border in an attempt to curb drug trafficking and crime.
For consumers, the impact could soon appear in everyday purchases. Those surprisingly affordable flat-screen TVs might see price hikes as tariffs bite into foreign brands' margins. due to the industry's reliance on Chinese raw materials. could get pricier.
Trade tensions , which is good news for American tourists but potentially devastating for U.S. exporters trying to compete in global markets.
It's a high-stakes game of economic chicken where every move ripples through global supply chains—and in some cases, consumers pay the biggest price. Whether this aggressive approach leads to new trade, border, and drug crackdown deals—or simply deeper economic and political tensions—remains to be seen, but one thing is certain: Consumers and businesses on both sides of the Pacific are bracing for impact.
used Census data to explore how the price of top imports from the U.S.'s leading trade partners may shift due to tariffs and currency values. The top imports were calculated by ranking both the total import value in U.S. dollars, and the share of total U.S. imports of that commodity from the country as of 2023.
Canada
Critical supplies like fertilizer and construction materials hang in the balance of any potential trade dispute between the U.S. and Canada. Our northern neighbor's dominance in rapeseed oil—which contributes to animal feed and biodiesel, among other uses—and fertilizer exports to the U.S. (98% and 86%, respectively) means any disruption could increase both American farmers' production costs and cut into food manufacturers' bottom lines. That potentially means higher prices at the grocery store and the gas pump. It could also for households that rely on heating oil, up to 30 cents per gallon.
Workers in U.S. if Canadian wood products and aluminum become harder to source. Consumers, already wrestling with sky-high prices and persistent inflation, could see everything from home renovation costs to certain Canadian-assembled vehicles get pricier, .
Because Canada's economy largely relies on the export of commodities, its currency is prone to fluctuations, particularly during times of volatility. The U.S. and Canadian dollars have a close relationship; aluminum and steel, two major exports from Canada to the U.S. may be impacted amid ongoing tariff uncertainty that began in early 2025.
But the possibility of tariffs remains, which could bring business activity down and and weaken the currency by making it less attractive to foreign investors.
China
China's grip on U.S. tech supply chains runs deep, for everything from smartphones ($54.6 billion in import value) and computers ($39 billion in import value) to gaming consoles (where China supplies 80% of U.S. imports).
Higher component costs and supply disruptions could force U.S. tech companies to accept lower profit margins and cut costs, including wages and jobs, . This has a profound effect on American software developers, engineers, and manufacturing workers who designed and built these devices, .
For consumers already struggling with high prices, trade tensions with China could mean significantly higher prices on like phones, laptops, and gaming systems, while the increased costs of electric vehicle batteries and automotive components could push new car prices even higher.
Even though China was the first country that Trump imposed new tariffs on in his second term, , with its fixed exchange rate, is than when he took office. China's targeted but limited reaction leaves open the possibility of a bigger trade deal to avoid a full-throated trade war.
Mexico
U.S. and Mexican auto industries are deeply intertwined through $32.8 billion in vehicle trade and complex supply chains that account for 75% of U.S. auto imports. A disruption in trade between the two countries , from assembly line staff to dealership employees. It could also .
American shoppers already dealing with higher grocery bills could see even steeper prices for everyday items like (where Mexico supplies 83% of imports), making weekly shopping trips more expensive for already stretched household budgets. Various tariff threats have sent the already volatile peso swinging this year, from . If the threatened 25% tariffs do go into effect, experts say the peso could fall even further, and Mexico's economy could slide into recession.
Story editing by Alizah Salario. Additional editing by Elisa Huang. Copy editing by Tim Bruns.
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