President Trump is imposing heavy tariffs on steel and aluminum to three of the United States’ main trading partners: Canada, Mexico, and the European Union.
The trade sanctions, 25% on imported steel and 10% on imported aluminum, come into effect at midnight, Trade Secretary Wilbur Ross told reporters on Thursday.
Mexico, the EU, and Canada immediately announced plans to retaliate with their own tariffs against US products.
Trump announced global steel and aluminum tariffs in March but granted exemptions to some of the major trading partners.
Canada, Mexico, and the EU were among the countries to which relief was granted, while the United States continued negotiations to address the administration’s concerns about the state of domestic steel and aluminum production. Those negotiations had a deadline for Friday.
Trump’s decision could increase prices for Americans in a variety of everyday products. It could also place the United States in a commercial dispute on more than one front. The administration is proceeding separately with tariffs on Chinese products.
Trump imposed steel and aluminum sanctions under a 1962 law that gives the president broad power to increase or reduce tariffs on products deemed critical to national security.
“We believe that without a strong economy, you can not have strong national security,” Ross told reporters.
Trump’s announcement lifted US steel and aluminum stocks because those companies will benefit from sanctions against their foreign competitors. US steel UU Up 3% But the broader market sank due to fears of the trade war. The Dow fell around 200 points.
Mexico said quickly that the action of the USA is not justified, and promised to retaliate with similar sanctions for American lamps, pork, fruit, cheese and flat steel.
Europe also said it would begin the process to enact retaliatory tariffs. He did not announce details, but the block had previously threatened 25% tariffs for US products such as motorcycles, denim, cigarettes, cranberry juice and peanut butter.
“Today is a bad day for world trade,” EU trade commissioner Cecilia Malmström said in a statement. “We did everything to avoid this outcome.”
Canadian officials said at a press conference that Canada would enact tariffs on 12.8 billion dollars in US exports, effective July 1, to retaliate against Trump’s action.
“Let me be clear,” Prime Minister Justin Trudeau said. “These tariffs are totally unacceptable.”
Foreign Minister Chrystia Freeland called it “the strongest trade action Canada has taken in the post-war era.”
Getting rid of the exemptions for Canada and Mexico could also complicate the ongoing NAFTA negotiations.
The NAFTA talks were a factor in the administration’s decision to grant exemptions to Canada and Mexico from steel and aluminum tariffs. But Ross said on Thursday that those talks “are taking longer than we expected.”
Canada was the largest exporter of steel to the United States by value last year, according to data from Wood Mackenzie. Mexico was the third largest, behind South Korea.
The Trump administration said on Tuesday that it is moving forward with tariffs on Chinese goods worth 50 billion dollars as punishment for the theft of intellectual property.
The Chinese government said the announcement was “obviously a violation of the consensus reached in Washington recently by China and the United States.” Both sides had previously said that tariffs would be suspended as the talks continued.
Ross plans to go to China this weekend for the third round of negotiations.
The United States is also exploring the possibility of establishing new rates for automobiles. Last week, the Trump administration announced an investigation into whether car imports are harming the national security of the United States., Setting the bases for another commercial battle.
Such action could harm Mexico, Canada, Germany, and Japan.